Partnership Registration in India: All You Need to Know Before Starting a Business Together

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Partnership Registration: Introduction

Starting a business can be a daunting task, but when you have a partner to share the workload, it becomes a lot easier. A partnership firm is a type of business structure where two or more people come together to run a business and share the profits or losses. In a partnership firm, each partner contributes to the business in some way and has a say in decision-making.

If you are planning to start a business with a partner, it is essential to register your partnership firm. In this article, we will discuss everything you need to know about partnership firm registration, including its pros and cons, steps to register, and FAQs.

Pros and Cons of Partnership Firm Registration:

Before we dive into the details of partnership firm registration, let’s take a look at its pros and cons.

Pros :

  • Easy to form: Partnership firms are easy to form as there is no requirement for any legal formalities or paperwork.
  • Shared responsibility: In a partnership firm, partners share the responsibility and workload, making it easier to manage the business.
  • Shared risk: Partners share the profits and losses of the business, reducing the risk for each partner.
  • Tax benefits: Partnership firms enjoy certain tax benefits, such as no tax on profits earned by the partnership firm, only on the individual income of the partners.


  • Unlimited liability: In a partnership firm, each partner is personally liable for the debts and obligations of the business. This means that if the partnership firm incurs losses, the partners’ personal assets can be used to pay off the debts.
  • Lack of control: Each partner has a say in the decision-making process, which can lead to conflicts if partners have different opinions.
  • Limited lifespan: Partnership firms have a limited lifespan, which means that if one partner leaves the business or dies, the partnership comes to an end.

Partnership Registration Fee

Basic Plan

₹ 2,999

Standard Plan

₹ 4,999

Premium Plan

₹ 11,999

Documents Required for Partnership Registration

Documents of Partner’s

  1. Pan card & Aadhaar Card
  2. Photograph of all partners
  3. ID Proof & Address Proof

Registered Address documents

  1. Rent Agreement or Property Tax Receipt or any Legal documents
  2. NOC from owner of Premises registration, gst registration, trademark registration

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Basic Requirement to Start Partnership Firm

Minimum Person

A minimum of two partners is required to start a Partnership Firm. The maximum number of partners allowed for a partnership firm in India is twenty partners. However, no foreigner is allowed as partners in the partnership firm.

Unique Name

You should select the name of the partnership firm that is unique & which reflects the main business activity. Ensure that the proposed name is not the same or similar to any existing business or trademark registered or applied.

Capital Requirement

There is no minimum or maximum capital prescribed under the Partnership Act 1932. You can keep the capital of the firm as per the business requirements. The stamp duty on the deed depends on the capital and the state.

Business Address

Address at which the firm carries on its usual business or maintains its books of account is known as its Principal Place of Business. The latest proof of the place of business along with a NOC from the premises owner is required.

Benefits of a Partnership

Minimum Compliance

For general partnerships, there is no need for an auditor to be appointed or, if the company is still in the process of registration or is still unregistered, annual accounts filing with the registrar is not necessary either. Annual compliances are also lower when compared to an LLP.

Simple To Begin

A general partnership can be formed within 2-4 business days, with an unregistered deed of partnership. However, registering for the event offers its own set of benefits.

Comparatively Economical

A general partnership is substantially less expensive to start than an LLP. It will still be cost effective in the long term because the compliance needs are minor.

Partnership Registration Process

Step 1: Choose a name for your partnership firm:

The first step in partnership firm registration is to choose a unique name for your firm. The name should not be the same as an existing partnership firm or company, and it should not violate any trademarks or copyrights.

Step 2: Prepare a partnership deed:

The next step is to prepare a partnership deed, which outlines the terms and conditions of the partnership. The partnership deed should include the following details:

  • Name and address of the partnership firm
  • Name and address of all partners
  • Nature of the business
  • Capital contribution of each partner
  • Profit-sharing ratio among partners
  • Responsibilities and duties of each partner
  • Dissolution and retirement terms

Step 3: Obtain a PAN card:

Partnership firms need to obtain a PAN (Permanent Account Number) card from the Income Tax Department. The PAN card is used for tax purposes and is required for opening a bank account and obtaining other necessary licenses.

Step 4: Register for GST:

If the partnership firm’s annual turnover is more than Rs. 20 lakhs, it is mandatory to register for GST (Goods and Services Tax). GST registration is done online, and the partnership firm will receive a GSTIN (Goods and Services Tax Identification Number) after successful registration.

Step 5: Obtain other necessary licenses:

Depending on the nature of the business, the partnership firm may need to obtain other necessary licenses and permits, such as a trade license, shop and establishment license, or a professional tax registration.

Step 6: Register your partnership firm:

Once you have completed all the above steps, you can register your partnership firm with the Registrar of Firms in your state. To register your partnership firm, you need to submit the following documents:

  • Partnership deed
  • Address proof of the partnership firm
  • Address proof of all partners
  • PAN card of the partnership firm
  • PAN card of all partners
  • Registration fee

After submitting the documents, the Registrar of Firms will verify the documents and issue a Certificate of Registration. The partnership firm is now legally registered, and you can start your business operations.

Comparison among different type of Business Registration Options in India

Features Private Limited Company OPC LLP Partnership Sole Proprietorship

Applicable Law

Companies Act, 2013

Companies Act, 2013

LLP Act, 2008

Partnership Act 1932

No Law Applicable

Number of members

2 - 200


2 - Unlimited

2 - 20


Number of Directors /DP

2 - 15


2 - Unlimited




Through ROC

Through ROC

Through ROC



Tax Benefits

The income tax rate for companies engaged in manufacturing activities is only 15%, while for all other newly set up companies it is 22%

The income tax rate for companies engaged in manufacturing activities is only 15%, while for all other newly set up companies it is 22%

LLP Income Tax Rate is 30% on its profits

Partnership firms are taxed at 30% on its profits

For a small business with low turnover, there is the benefit of individual tax slabs.

Statutory Compliance






Foreign Investment (FDI)

Foreign Direct Investment in case of a Private Limited Company is available under the automatic route.

FDI is not allowed in One Person Company

FDI in LLP Is permitted at par with the companies

FDI not Allowed 

FDI not Allowed 

Separate Legal Entity

A Company is a separate legal entity separate from its promoters

An OPC is a separate legal entity separate from its promoters

An LLP is a separate legal entity separate from its promoters

A Partnership is a legal entity but not different from partners

The proprietor and the proprietorship business is the same thing

Limited Liability

Liability Limited - Shareholders of a Company are bound to pay only up to the capital they have subscribed to the company.

Liability Limited - In OPC, unlike a proprietorship, the shareholder cannot be asked to pay beyond his subscribed capital

Liability Limited - The partners of an LLP can be called upon to pay only up to the amount of capital they subscribed to.

Liability Not Limited - There is no protection of limited liability, even the personal properties of partners are at risk for losses of business

Liability Not Limited - The proprietor is the whole sole of the business, and his liability to the debts or losses of proprietorship is unlimited.

Ownership Transferability

The shareholding of a Pvt Ltd Company is easily transferable

OPC Shares can be transferred to new shareholder along with the nominee

In LLP contribution/share of a partner can be transferred with the consent of all other partners.

Not Possible, every admission or removal of a partner amounts to the new firm.

Not Applicable

Perpetual Existence

A Company exists beyond the life of its owners /shareholders. After the death, the shares transmits to legal heirs

OPC Continues to exist even after the death of its only shareholder, as it passes to the nominee.

The LLP also have perpetual existence and exists beyond the life of the designated partner

No perpetual existence, with the death of a partner, the partnership ends.

No perpetual existence, with the death of the proprietor, it ends.

FAQ on Partnership Registration

What are Different option available for Business registration in India?

Please Refer following Link - click here 

What is a partnership firm?

A partnership firm is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a partnership deed that may or may not be registered.

Is partnership firm registration mandatory?

No, partnership firm registration is not mandatory, but it is highly recommended to register your partnership firm to enjoy certain legal and tax benefits.

Is a partnership firm a separate entity?

The partners in a partnership firm are the owners, and thus are not a separate entity from the firm. Any legal issues or debt incurred by the firm is the responsibility of its owners, the partners.

How much time does it take to register a partnership firm?

The registration of a partnership firm in India can take up to 10 to 12 working days. However, the time taken to issue a certificate of incorporation may vary as per the regulations of the concerned state. The registration of a partnership firm is subject to government processing time which varies for each state.

What are the minimum and the maximum number of partners required for the formation of partnership firms in India?

Minimum of 2 persons and maximum of 20 is required for the formation of a partnership firm.

Who can be the partners in a partnership firm?

The individuals who are residing in India can only become partners or members in a partnership firm. Foreign individuals who want to form their business in India can choose private limited companies.

What is the capital amount needed for the partnership firm registration in India?

There is no minimum capital requirement for the registration of a partnership firm in India.

What is the scope of liability when it comes to partnerships?

Every partner is jointly and severally accountable for any acts/activities of the firm committed throughout the course of business while he or she is a partner. This means that if a third party is injured or a penalty is imposed during the course of business, all partners will be held accountable, even if one of the partners caused the injury or loss.

Can a partnership firm be converted into a private limited company?

Yes, a partnership firm can be converted into a private limited company by following the necessary legal procedures.

What is the difference between a partnership firm and a limited liability partnership (LLP)?

In a partnership firm, partners have unlimited liability, while in an LLP, partners have limited liability. LLPs also have a separate legal entity and are taxed differently than partnership firms.