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Partnership firms in India are governed by the Partnership Act, 1932. Section 4 of the Act defines Partnership as - "An agreement between persons who have agreed to share profits of the business carried on by all or any one of them acting for all." So in such a case two or more (maximum numbers will differ according to the business being carried) persons come together as a unit to achieve some common objective. And the profits earned in pursuit of this objective will be shared amongst themselves.


Registering a firm under the Partnership Act (hereinafter called the Act) is not mandatory as in the case of setting up a company, but it is always advisable to get your firm registered by preparing a partnership deed with the Registrar of Firms soon after its formation Because an unregistered firm cannot sue outsiders although outsiders can sue the firm. Register.

The procedure for registration of a partnership firm in Tamilnadu is fairly simple. An application with partnership deed and the prescribed fees are required to be submitted to the Registrar of Firms of the State in which the firm is situated. The following documents are also required to be submitted along with the application:

  1. Application for Registration of Partnership in Form No. 1
  2. Duly filled specimen of Affidavit or authorization letter.
  3. Certified True Copy of the Partnership Deed
  4. Ownership proof of the principal place of business or rental/lease agreement thereof.
  5. Identity proof
Choose a partnership name

The partners are free to choose any name as they desire for their partnership firm subject to the following rules:

  1. The names must not be too identical or similar to the name of another existing firm doing similar business, so as to avoid confusion. The reason for this rule being that the reputation or goodwill of a firm may be injured, if a new firm could adopt an allied name.
  2. The name must not contain words like Crown, Emperor, Empress, Empire or words expressing or implying the sanction, approval or patronage of the Government, except when the State Government signifies its consent (in writing) to the use of such words as part of the firm name.
Required contents in the Partnership Deed

It should contains name of the firm; nature of business; names and addresses of the partners; principal place of business address and the branches if any; date of commencement of business of the firm; duration of the partnership and the mode of dissolution; the amount of capital to be contributed by each partner; the share of profits to be taken by each partner; the mode of management; the powers of the partners; terms on which a partner can retire; expulsion of partners; introduction of new partners, amendment clause, alternative dispute resolution clause etc.

Effect of Non-Registration

An unregistered firm and the partners thereof suffer from certain disabilities due to non-registration which are as follows:

  1. A partner cannot file a suit (against the firm or any partner thereof) for the purpose of enforcing a right arising from contract or a right conferred by the Partnership Act.
  2. No suit can be filed on behalf of an unregistered firm against any third party for the purpose of enforcing a right arising from a contract.
  3. An unregistered firm cannot claim a set-off in a suit.

There are certain exceptions to the rules stated above.

  1. A partner of an unregistered firm can file a suit for the dissolution of the firm and for accounts.
  2. Suits can be filed for the realization of the properties of a dissolved firm even though it was unregistered.
  3. The Official Assignee or Receiver can realize the properties of an insolvent partner of an unregistered firm.
  4. There is no bar to suits by unregistered firms and by the partners therefore, in areas where the provisions relating to the registration of firms do not apply by notification of a State Government.
  5. An unregistered firm can file a suit (or claim a set-off) for a sum not exceeding Rs. 100 in value, provided the suit is of such a nature that it has to be filed in the small causes court. Proceedings incidental to such suits, e.g., execution of degrees, are also allowed.

Registration Boss opines that “It is mandatory for all firms to apply for Registration with the Income Tax Department and have a PAN Card. After obtaining a PAN Card, the Partnership Firm would be required to open a Current Account in the name of the Partnership Firm and operate all its operations through this bank account. Minors cannot be a partner in a firm, but he/she can be admitted into the already existing or running firm for the benefits of the firm alone if all the partners of the firm agrees and he/she cannot be a full fledged partner and has limited liability. He/she should have to give a notice of his intention to the registrar of firm in Form-F within 6 months of his/her attaining majority as to whether to continue as full fledged partner or not.”

Admission of new partner, reconstitution of partnership deed can be done through registration of fresh amendment deed enclosed with proper forms to thr registrar of firms. So careful drafting of Partnership Deed/ Amendment Deed would go the way of contradiction free for further process. For any assistance required to prepare a partnership deed, you may contact without any hesitation to our Registration Boss Expert…

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