Partnership Firm
A traditional business structure governed by the Indian Partnership Act, 1932. Ideal for small local businesses, trading firms, and localized ventures that do not require external equity funding and prefer minimal statutory compliance.
Key benefits
- Extremely Simple Setup: Can be formalized in a few days through a notarized deed without MCA portal approvals.
- Minimal Compliance: No mandatory ROC filings, no statutory audit (unless tax audit turnover limits are breached).
- Confidentiality: Financials and internal agreements are not published on any public government database.
- Flexibility: Changes to profit-sharing, capital, or business scope can be done simply by amending the deed.
- Lower Cost: The cheapest multi-founder structure to setup and maintain annually.
Documents required
- PAN and Aadhaar of all partners.
- Address proofs of all partners.
- Registered Office Proof: Utility bill and NOC from landlord.
- Partnership Deed parameters: Capital contribution ratios, profit sharing ratios, and remuneration details.
How it works
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1
Deed Drafting
Our legal experts draft a robust Partnership Deed explicitly defining rights, dispute resolution, and dissolution terms.
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2
Notarization & Stamping
The deed is printed on non-judicial stamp paper of appropriate value and notarized.
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3
PAN Application
Applying for the firm's PAN card using the executed deed.
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4
ROF Registration (Optional)
Filing the deed with the state's Registrar of Firms (ROF) to give the firm legal standing to sue third parties.
Frequently asked questions
Is it mandatory to register the partnership with the ROF?
No, it is optional. However, an unregistered firm cannot file a lawsuit against third parties or partners to enforce rights. We highly recommend ROF registration.
What is unlimited liability?
In a partnership, partners are personally liable for the firm's debts. If the firm defaults on a loan, banks can seize the personal assets (house, car) of the partners. (Consider an LLP to avoid this).
How is a partnership taxed?
Partnerships are taxed at a flat rate of 30% (plus surcharge and cess). Partner remuneration and interest on capital are deductible expenses for the firm, subject to Section 40(b) limits.
Can a partnership firm be converted into a Pvt Ltd?
Yes, under Part I of Chapter XXI of the Companies Act, but the process is highly complex. If you plan to scale, it is better to start as a Pvt Ltd or LLP.