What is a Partnership?

A partnership firm is a widespread form of business constitution for businesses that are maintained, managed, and controlled by an Association of People for profit. Partnerships are relatively easy to form and are popular with small businesses in the unorganized sector. Partnerships are one of the most preferred ways to start a business in India because of their simplicity

Is it mandatory to register a Partnership Firm?

There is no need to register a partnership deed, in India. It is not mandatory to register a partnership firm under the provisions of the Partnership Act, 1932. Though, it is better to register a partnership firm. If the company is not registered, you will not be able to take advantage of the legal benefits granted to the company under Partnership Act 1932.

Establishing a partnership is easy because there are no complicated business procedures. Partnership Act 1932 regulates the registration of partnership companies in India. At least two people are required to register as a partnership company.

Why Partnership Firm Registration is Important?

Under Part VII of the Indian Partnership Act, 1932 the registration of a partnership firm is not mandatory. Though, it can be done in order to avail of the benefits of Registration. It is the choice of the partners to register the firm and there are no consequences for non – registration.

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The following are the disadvantages of an unregistered firm:

  • Only a registered partner company can claim a set-off
  • An unregistered partnership cannot recover any amount owed by a third party if the amount in question is more than Rs. 100 /
  • Partners of an unregistered company may not sue another partner of the company or the company itself

What legal benefits do registered partnerships offer?

A registered company or partner may sue a third party for breach of contract. If the company is not registered, the partnership firm cannot file a case against the third party but the third party can file a claim against the firm. In addition, if a dispute arises with a third party, the unregistered company or its partner cannot claim set-off.

How much time is required to register a partnership?

Up to about 10 business days to register your partner company in India. However, the time required for issuance of the registration certificate may vary according to the regulations of the respective state. Registrations of associate companies are subject to different government processing times from state to state.

The following documents are required to register a partnership firm:

(a) Statement in Form 1 with the required fees

(b) A notarized certified true Copy of the Partnership Deed showing the following:

The firm-name,

The nature of business of the firm;

The location or principal place of business of the firm,

The name of any other place where the company carries out its activities,

Date of joining of each partner to the company,

The full name and permanent addresses of the partners, and

The term of the firm.

(c) Proof of ownership or rental/lease of the place of your business.

The application must sign all the partners of the firm. It must also be attested by an affidavit in the prescribed manner.

All of these must be filed with the state business registry. The registrar will then issue a registration certificate and a copy must be issued to all partners. In addition, separate registration with the income tax department is required to avoid future troubles and must have a PAN card and a bank account in the name of the partnership and a bank account.

Can the Certificate of Registration be revoked?

In a sense, a partnership certification of incorporation can be cancelled, at the time of dissolution. Dissolution may occur automatically if all partners or all but partners except one partner are declared bankrupt or if the firm is engaging in illegal activities.

When do partners need to apply for partnership company registration?

A partnership firm can be registered at the time of its establishment or even subsequently at any time thereafter. However, it is recommended to get the firm registered immediately after the business start, for availing the rights that can be enjoyed only by a registered firm

Right not to be affected by refusal to register as a business partner 

1. The right of a partner to file a lawsuit for the dissolution of the firm or for the accounts of a dissolved firm or to implement any right or power to understand the property of a dissolved firm.

2. The power of an official assignee or recipients to understand the property of a bankrupt partner. 

3. The rights of the firm, or its partners, have no place in business in India.

4. Claims or offsets within which the claim doesn’t exceed rupees hundred.

5. The right of third parties to sue the unregistered firm or its partners.

6. The right to file a lawsuit against a third party for infringement of a patent right


The Indian Partnership Act, 1932 guarantees the registration of a partnership firm without making it obligatory. It’s not mandatory to register a partnership firm but a firm can enjoy many advantages that the Partnership Act provides upon its registration. Therefore, the registration of a partnership firm protects the firm and its partners from the effects that it might have if it’s not registered.