What is Partnership Registration?

Partnership registration means the registration of the partnership firm by its partners with the Registrar of Firms. The partners should register their firm with the Registrar of Firms of the state where the firm is located. Since partnership firm registration is not compulsory, the partners can apply for registration of the partnership firm either at the formation of the firm or subsequently at any time during its operation.

For partnership registration, the two or more people must come together as partners, agree on a firm name and enter into a partnership deed. However, partners cannot be members of a Hindu Undivided Family or husband and wife. 

Importance of Registering a Partnership Firm

The registration of a partnership firm is optional and not compulsory under the Indian Partnership Act. It is at the discretion of the partners and voluntary. The firm’s registration can be done at the time of its formation or incorporation or during the continuance of the partnership business. 

However, it is always advisable to register the partnership firm as a registered partnership firm enjoys certain special rights and benefits as compared to the unregistered firms. The benefits that a partnership firm enjoy are:

• A partner can sue against any partner or the partnership firm for enforcing his rights arising from a contract against the partner or the firm. In the case of an unregistered partnership firm, partners cannot sue against the firm or other partners to enforce his right.
• The registered firm can file a suit against any third party for enforcing a right from a contract. In the case of an unregistered firm, it cannot file a suit against any third party to enforce a right. However, any third party can file a suit against the unregistered firm.
• The registered firm can claim set-off or other proceedings to enforce a right arising from a contract. The unregistered firm cannot claim set off in any proceedings against it.

Procedure for Registering a Partnership Firm

Step 1: Application for Registration

An application form (Form 1) has to be filed to the Registrar of Firms of the State in which the firm is situated along with prescribed fees. It has to be signed and verified by all the partners or their agents. The application form (Form 1) can be obtained from the Registrar of the Firms office or it can be downloaded from the respective state's Registrar of Firms website. 

The application can be sent to the Registrar of Firms through post or by physical delivery, which contains the following details:

• The name of the firm.
• The principal place of business of the firm.
• The location of any other places where the firm carries on business. 
• The date of joining of each partner.
• The names and permanent addresses of all the partners.
• The duration of the firm. 

Step 2: Selection of Name of the Partnership Firm

Any name can be given to a partnership firm. But certain conditions need to be followed while selecting the name:

• The name should not be too similar or identical to an existing firm doing the same business.
• The name should not contain words like emperor, crown, empress, empire or any other words which show sanction or approval of the government.

Step 3: Certificate of Registration

If the Registrar is satisfied with the registration application and the documents, he will register the firm in the Register of Firms and issue the Registration Certificate. The Register of Firms contains up-to-date information on all firms, and anybody can view it upon payment of certain fees.

An application form along with fees is to be submitted to the Registrar of Firms of the State in which the firm is situated. The application has to be signed by all partners or their agents.

Documents for Registration of Partnership

The documents required to be submitted to Registrar for registration of a Partnership Firm are:

• Application for registration of partnership (Form 1)
• Certified original copy of Partnership Deed.
• Specimen of an affidavit certifying all the details mentioned in the partnership deed and documents are correct.
• PAN card and address proof of the partners.
• PAN card and address of the firm.
• Proof of principal place of business of the firm (ownership documents or rental/lease agreement).