Background:

A partnership, as normally construed, is an association of two or more persons, who agree to do business together. Governed under the provisions of Partnership Act 1932, a partnership is a very simple form of business with very little compliances. A partnership firm is formed once the partners decide to enter into an agreement to share profits and losses of the business. Partnerships are a very good choice of small enterprises because of their ease in formation and also minimal compliances.

Types:

There are two types of partnerships:
1. Registered Partnerships
2. Unregistered Partnerships

As per Partnership Act, there is no requirements of mandatory registering the partnership. A partnership business can be started after entering into an agreement (called as partnership deed) and applying for the PAN of the partnership without having to register it. However, a unregistered partnership has following disadvantages:
1. No suit by a partner against other partners or firm
2. No suit against any third party
3. No right to counter claim or to claim setoff
4. Cannot go for arbitration proceedings.

Procedure:

1. Entering into an agreement called a partnership deed
2. Apply for PAN and TAN of the partnership
3. Getting the partnership registered, if needed.

Information & Documents Required:

– PAN Card and Aadhaar card of all the partners
– Name of the proposed partnership and the electricity bill of the registered office address of the partnership
– A detailed description of the nature of the business.
– Total capital contribution of the LLP along with each partner’s share and their profit sharing ratio.
– Whether partners wish to draw out any salary from the partnership business or charge any interest on the capital provided by them to the business.
– Whether any interest is proposed to be charged on drawings made by the partners.
– Soft copies of the photos of all the partners.
– Email ID and Phone numbers of all the partners.