Firm Registration – Registering a Partnership Firm in India

Here are complete instructions on firm registration so you can register your Partnership Firm with the Government.

So, how can you be sure that your business is considered a partnership firm, then?

For starters, partnerships are types of firms that do not result to unlimited liability to its members, compared to traditional businesses. What sets partnership firms in India apart is the fact that partnership firms do not need to have at least one mandatory member who would shoulder unlimited responsibility. Therefore, the liability would then depend on the capital that the partners have invested for the current business.

Another thing you can keep in mind is that partnership firm members would be able to have high level of protection, and only limited liability when it comes to financial risks regarding the business.

Before you set out for firm registration of your partnership firm, you do have to be mindful of the following:

  • You or your partner/s cannot file any suit in court against other partners or the firm itself, as this is written in India’s Partnership Act.
  • You or any of your partners cannot claim mutual adjustment of debts, otherwise known as set-offs, which are owned by disputant parties, or any other proceedings.
  • You cannot enforce any contract from the court, and it couldn’t be allowed to arise in any way.

Choosing a Name for Your Partnership Firm

One important thing that you should do first when it comes to proper firm registration of a partnership firm is that you have to choose a name for your business first. For this, you have to keep two important things in mind, and these are:

  • You have to make sure that the name isn’t too similar to that of another existing firm. This way, confusion would not ensue, and in case the other firm with the same name as yours gets into squabbles, or gets negative reputation in business, your business would not be compromised. There are also several mobile apps that can help you check whether the name you want is already registered or not.
  • You have to make sure that you would not use the following names for your business: Emperor, Crown, Empire, and Princess. Using these terms would not make firm registration easy because these words imply patronage, approval, or sanction of the Government, unless you have to use them as allowed by the government itself.

Check for Name Availability. You might also want to check the availability of your chosen name/s first, just to be sure. This will also save you a lot of time and effort so you won’t have to waste your firm registration time choosing names that have already been taken, or are not allowed. To do this, just follow the guidelines below:

  • Go to the MCA website, and then enter your proposed name in the space labeled Company Name.
  • You’ll then see a dropdown box that shows names of the same kind, if any, so you’d know if your chosen name has already been used before, or if it might cause confusion once you push through in using it.
  • If you see the words “no records found” flashing on your screen, it means that there are no companies with a similar name, and you can push through with using the name that you have already chosen.
  • You can also do the same to check for trademarks or trademarked names. Just enter your proposed name in the wordmark, followed by relevant class, and then you’ll see if any records have been found or not.

The Process of Registration

Now that you’re able to prepare for it, it’s time to understand how the process of firm registration should go for your business. For this, you need to make a partnership deed, mostly because oral arguments do not have any value whatsoever when it comes to the state of your business. A partnership deed should include the following:

  • Name and address of the firm—which also includes names and addresses of all partners involved;
  • Enter your full name, which should be more than a single alphabet in both the first and last name fields. You’d have to fill up your father’s name, as well.
  • Attach a photograph with a full view of your face, facing front.
  • If you’re a foreign national, the nationality you should input is the one that’s written on your passport.
  • Enter educational attainment and current occupation, as well.
  • Take note that for foreign nationals, adding passport number is mandatory to make firm registration
  • Enter residence details—and make sure it matches your current area of residence, and not where you have lived years ago, or in the future.
  • The date when the business was commenced, or would be commenced;
  • The Nature of the business that you’d be carrying on. This means that you have to say what the business would be about, why it is important to put the business up, why it matters in its niche, etc;
  • The Capital Contribution of each of the partners;
  • The Duration of the Partnership. This could denote whether it’s for a given period of time only, or if it would be for a permanent position or amount of time, and;
  • The kind of profit-sharing that would happen between the partners.
  • Provide identification details, affidavits, if needed, and digital signature. Once you have provided all the required details, register using the eForm, also on the said website.

To make firm registration happen, you have to make sure that the application is signed and verified by all of the partners, and that all the prescribed fees are enclosed within the partnership deed, or application documents.

Application Form 1

In the envelope, you will also have to enclose Form 1 for firm registration, which should contain the following:

  • The Class No. of Your Business—you can figure this out at the office of the Ministry—there are lists you can follow there;
  • The full name and nationalities of the partners;
  • Design/blueprint or sketches of the business;
  • The name of the article or design which the business applies to the trade description of each set;
  • Name of country, official date when the business was set or has been thought of, official number of service, and make sure that you have it addressed to the Controller of Designs in Calcutta.

Specimen of Affidavit

The next step in firm registration in India is to make sure that you fill up your specimen of affidavit. Basically, this is a sworn statement that would verify firm registration, and make sure you’re following due process. The affidavit should contain the following:

  • The identity of the person making the declaration (you and your partners), or the declarant;
  • The individual’s current address—do this for each one signing the document, or the location;
  • The signature of the one who’s signing the affidavit, also known as signature;
  • A list or statement of facts that you’re trying to declare under oath, and;
  • Notary Acknowledgment—which means that you need to have the affidavit notarized to verify its authenticity.

Completing the Partnership Deed

Aside from what was mentioned, you have to complete your partnership deed by adding the following:

  • Commissions, salaries, and other forms of payables to all parties;
  • Partner’s Capital Interest and Interest Rates, all of which have to be charged on drawings;
  • Account Preparation Methods;
  • Rules that the company would have to follow in case of accidents, bankruptcies, or deaths, and;
  • Division of responsibilities and tasks, together with obligations and powers for all of the partners

You can customize and personalize the partnership deed, depending on the kind of business you have, and what you and your partners deem to be good for it, and should be placed on a stamp paper for it to be considered helpful for firm registration. This is in accordance to the Indian Stamp Act, which contains the following parameters:

  • Several instruments should be used for single transactions of mortgages, sales, or settlements;
  • Instruments should be chargeable with duty;
  • No payment on principal instruments of the Payment of Punjab Duty should not be made prematurely;
  • Debentures and Bonds relating to 1879’s Act 11 should be declared;
  • There should be sea insurance policies;
  • The use of adhesive stamps should be well thought of;
  • You have to know how duties should be paid;
  • There should only be one instrument on the same stamp;
  • The deed should denote the proper duties of the partners involved;
  • Facts affecting the said duties should be duly noted;
  • Payable duties should be made known, and;
  • There should be obligation to give receipts up on certain cases.


Acquire DSC. Next, you’d have to get DSC, or Digital Signature Certificate so that you would get the right level of security. If you have managed to read the earlier instructions, you’d know that you can get this while applying for DIN eForm 1. However, if you choose to make this the first step of your personal firm registration, you can check out a couple of websites that can allow you to do this. Not only will you be able to download the certificate you need, you will also be able to track your application, review certificates, and revoke them, if needed.

Now that you know how firm registration happens, it wouldn’t be a surprise if another question plagues you, and it is about how much the whole registration process will cost.

How much would it cost?

What you have to know is that there are different fees that you’d have to be prepared to pay during firm registration. These are as follows:

  • Firm Partnership Registration. This could be around Rs 500 to Rs 5000, depending on the amount of contribution, which in itself could range from Rs 1 Lakh to Rs 10 Lakh. Take note that these fees will have to be paid until you have submitted or have gone through Form 3.
  • Document Recording/Registration. You would also have to pay for the recording or registration of documents that you have. These include forms, Statement of Accounts and Solvency, notices, or any other kind of annual returns that could make way for the registration, privatization, or conversion of any companies. This could go from RS 50 to Rs 500, depending on the amount of contribution, which could range from Rs 1 Lakh to Rs 10 Lakh.
  • Conversion of firms or unlisted public companies. Applications of names u/s 16 would cost Rs 200; names u/s 18 would cost Rs 10,000; names under rule 18 would cost Rs 10000; renewal of names would cost Rs 5000, and application for DPN rule would cost Rs 100.
  • Inspection of Documents. You might also have to pay to have your documents inspected properly. For documents under section 36 of the LLP, you’d have to pay Rs 50; for extraction or copy of documents under section 36, you’d have to pay Rs 5 per fractional page, as filled up by the registrar or Ministry.
  • Statement of Accounts and Solvency. And of course, you would also have to pay for the notices or solvency of documents courtesy of the foreign limited liability partnership. Documents under rule 34 cost Rs 5000, and any other documents or forms of Accounts and Solvency would cost Rs 1000.

These costs are laid out not to scare you, but to make sure that you would be prepared for them, so that the incorporation of your firm would not be derailed simply by small financial matters—and so you’d know what to expect, as well, and that way, firm registration would not be a hassle.

Keep the Following in Mind

Finally, you have to keep the following in mind so that you won’t be confused when it comes to firm registration:

  • It is a Separate Legal Entity. Partnership Firms are considered as juristic persons, and legal entities, based on the Partnership Act of India. This means that it is its own property—no matter how small it is—which means it is seen as a form of organization, and at the same time, it can also incur its own debts, without affecting others in the process. This also means that Firm Partners would have no liability to creditors—which is definitely a winning situation for the firm.
  • One is not responsible for the other. When a business goes down, what comes to mind is that everyone gets to be affected, especially the business owners or managers. That’s not the same for Partnership Firms. When your partner experiences certain losses, it does not necessarily mean that you will, too. If your partner gets involved in fraud, it also does not necessarily mean that you’ll have to be indicted, as well. It also means that your personal properties would not be taken as collaterals to pay off your debts—which definitely lessens the hassle of the process for you.
  • An uninterrupted existence. Partnership Firms make way for perpetual succession. This basically means that the firm would have uninterrupted existence, and would still be continued until the event that it gets dissolved. This also has a lot to do with the fact that it is a separate entity, which means it would not get affected by departures of any kind, or worse, death. It would go on, no matter what the changes in partnership might be.
  • Easy Transferability. Suppose you or your partner would want to give your rights as owner of the firm to somebody else, you would be glad to know that when it comes to Partnership Firms, transferability is fairly easy. What you only have to do is introduce and induct them as your Designated Partners, which would then allow Managing Partners to be changed, and thus, the ownership of the firm follows.
  • Ownership of Property. You and your partner/s would be considered as both the owners and managers of the company, and no one else could take that position and power away from you. No other person could also claim ownership of the property, unless it has been legally transferred, as well.

Keeping Things Right and Legal

As you can see, partnership firms are pretty much the kind of businesses you’d like to get yourself into. They give you enough privacy, security, and freedom, especially if you’re new in the world of business. It gives you enough power to run the business without negatively affecting your personal life. It also gives you the chance to have working power transferred to those you see fit, without having to go through unnecessary rubbles.

Of course, there are downsides, too, such as the fact that partnership firms cannot, in any way, raise public funds, and that the wind up process may be a bit complicated. The amount of fees that you’d have to pay may even be considered staggering by some.

But when it comes to allowing you to run your business freely, and make sure that you have something you will be proud of, partnership firms are the real deal. This is why it makes sense to know what needs to be done to make things legal.

Now that you know how firm registration is done, you now have the chance to achieve the kind of business that you can make an honest living from—and now, you can also be sure that everything will be right and legal, too.

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