A Partnership is where two (or more) people join hands to carry out a business for profit. The partners become joint business owners and carry out operations governed by the partnership deed. The regulations are least and it makes it a desirable option for businesses having joint owners. However, in a partnership firm the partners are jointly and individually liable for debts of the firm. This form of structure is ideal if there are no/less requirement of external funds and low risk of bad-debts for example consultancy firms.

Partnership firms are governed by the Indian Partnership Act, 1932. Under the act, registration is not mandatory but it is advisable due to following reasons:

• Partner(s) can’t file a case in any court against the firm/ other partners unless firm is registered.
• The unregistered firm or its partners can’t file a case against third party on breach of a contract but the third party can file a Expert'se
• In case of a dispute with a third party, the unregistered firm or any of its partners cannot claim a set off

A partnership firm can be registered whether at the time of its formation or even subsequently. The application for registration is to be made to the registrar of firms of the region in which the business is situated. It is advisable to get the firm registered as soon as it starts its business to avail the rights that can be enjoyed only by a registered firm.

The name of a partnership firm should not contain any words which indicate the approval/support of the government other than a case where the government has given its written consent for the use of such words as part of the firm’s name. Key pointers:

• The names must not be too identical or similar to the name of another existing firm doing similar business.
• The name must not contain words like Crown, Emperor, Empress, Empire or any other word indicating government approval.

The government fees applicable varies from state to state based on partner contribution. In most states the fee falls in range of Rs.1000-1500 along with stamp duty. Our experts will guide you on this. You will be charged only on actual government fees.