How to form partnership firm - Tax Rupees

In India, all partnership firms are formed under the India partnership Act 1932 partnership firm is formed by two or more people and executed by entering into partnership agreement (partnership deed) .partnership deed is a formed agreement between the partner of a business to manage a business and share profit as well as loss. a partnership deed is the only essential document required for incorporating a partnership firm. The registration of the partnership firm is optional as per the provisions of India partnership Act 1932 however it is preferred by businessmen because registration firms have strong legal stability. partnership firms can be registered at any time after their formation:-

The following steps describe a basic procedure for starting partnership firms:-

Step1:- Selection of Name for a partnership firm

Step2:- Preparation and execution of partnership deed - The partnership deed must include the following basic information.

  1. The name and address of the firm
  2. Details of names and addresses of all partners
  3. Date of commencement of business
  4. Nature of business
  5. The capital contribution of each other partner
  6. percentage of profit and loss sharing of each partner
  7. Duties, power and the liability of each other

The partnership deed shall be notarized after providing the signature of all partners along with a signature of the witness to the agreement.

Step3:- Apply for a PAN card in partnership name - The application for allocation of PAN shall be made to the Income Tax department.

Step4:- Registration of partnership firms with the registration of Firms (ROF) - An application form (FORM A ) is to be submitted to the registrar of firms (ROF) of the state in which the firm is situated along with the prescribed fees. Following are the documents required for the registration of partnership firms.

  1. Application form (FORM A) duly signed by all partners.
  2. A certified original copy of partnership deed.
  3. Self affidavit certifying that all information in the application and documents are correct.
  4. Self-attested copy of permanent Account Number (PAN) card.
  5. Residence proof of the partner.
  6. Proof of business place i.e. (ownership document or rent/ lease agreement).

The registration of a partnership firm involves payment of a government fee to the registrar, which may vary from state to state . After getting a partnership registration certificate from the appropriate authority. The partnership firm will be duly registered and the firm will be entitled to all the benefits of registered partnership firm.
Step5:- Opening a current Bank Account -  After obtaining a partnership registration certificate the partner is required to open a current account in the name of the partnership firm and operate all the transactions through this bank account.