• Legal proof of the business
• The ability to enforce contracts in court
• Better access to loans and government benefits
• Enhanced credibility with clients, suppliers, and banks
• Protection of partner rights through documented agreements

• Minimum Two Partners: At least two individuals are required to form a partnership.
• Profit Sharing: Partners divide profits and losses as per their agreed ratio.
• Personal Liability: Partners are personally liable for business debts.
• Shared Control: Every partner can participate in decision-making and business management.
• No Separate Legal Entity: The firm and its partners are legally the same.
• Mutual Consent: The firm can be dissolved with mutual agreement among partners.

• Legal Recognition: Establishes legal standing and helps resolve disputes effectively.
• Easy Formation: Requires minimal documentation and is faster to set up compared to companies.
• Access to Credit:Banks and lenders prefer dealing with registered entities.
• Operational Flexibility: Partners have the freedom to manage business operations with ease.
• Tax Benefits: Eligible for business deductions and various MSME incentives.
• Simplified Succession: Clearly defined rules for partner changes or firm closure.

Though registration is optional, having a registered firm provides significant operational and legal advantages.

• Unlimited Personal Liability: Partners are personally responsible for firm debts
• Limited Growth Potential: Cannot raise funds through equity or public offering.
• No Separate Legal Identity: The firm and partners are treated as one legal entity.
• Risk of Dissolution: The death or retirement of a partner can dissolve the firm.
• Ownership Restrictions: Partner rights can’t be transferred without mutual consent.

• Minimum of 2 partners (maximum 50)
• All partners should be adults (18+)
• A lawful business purpose
• A properly drafted Partnership Deed
• No disqualified or insolvent individuals as partners.

• Partnership Deed (on stamp paper)
• PAN Card of each partner
• Address proof of partners (Aadhaar/Passport/Voter ID)
• Proof of business address (rent agreement, utility bill)
• Passport-size photographs of partners
• PAN card of the firm (after registration)

• NOC from landlord (if rented premises)
• GST Registration (if turnover exceeds limits)
• Other licenses as per business nature

• 1. Choose a Business Name

  Pick a unique, lawful name that reflects your business activity and doesn’t resemble government entities.

• 2. Draft the Partnership Deed

  Include details like partner names, business nature, capital, profit-sharing ratio, duties, and succession terms.

• 3.Get a PAN for the Firm

  Apply for a Permanent Account Number in the firm’s name for taxation and bank operations.

• 4. File Form 1 with the Registrar of Firms

  Submit the registration application with necessary documents and applicable fee.

• 5. Obtain Certificate of Registration

  After verification, the Registrar issues a Registration Certificate confirming legal recognition.

• 6. Open a Current Bank Account

  Use the registration certificate, firm PAN, and other documents to open a bank account in the firm’s name.

• Income Tax Return (ITR-5) filing
• TDS deduction and quarterly filing (if applicable)
• GST registration and return filing (if applicable)
• Maintain proper books of accounts
• Update Partnership Deed on any changes
• Comply with state-specific licenses (Shops & Establishment Act, etc.)

• Flat 30% income tax on profits
• Additional surcharge and health & education cess
• Tax deductions for legitimate business expenses
• Tax audit if turnover exceeds ₹1 crore (business) or ₹50 lakh (professionals)
• Partners' share of profit exempt in their hands; salary and interest taxed as individual income

• No mandatory renewal — registration remains valid unless voluntarily cancelled.
• Cancellation possible on firm dissolution, business closure, or conversion to another entity.