Is Partnership Registration Mandatory?

What is a Partnership?

Partnership Registration Mandatory – A frequent sort of business structure for organizations that are managed, owned, and administered by a number of people for profit is a partnership firm. Small businesses in the unorganized sector frequently form partnerships because they are so easy to set up. Partnerships are one of the most common ways to launch a business in India due to their ease.

Partnership Registration Mandatory

Is it Mandatory to Register a Partnership Firm?

A partnership deed is not necessary to file in India. A partnership firm does not need to be registered, according to the Partnership Act of 1932. However, it is preferable to form a partnership business. If the company is not registered, you will not be able to utilize the legal advantages provided to the firm under the Partnership Act of 1932.

The process of creating a partnership is simple because there aren’t any onerous corporate requirements. In India, partnership firms must be formed in accordance with the Partnership Act of 1932. A minimum of two people must register a partnership corporation.

Why Partnership Firm Registration is Important?

Part VII of the Indian Partnership Act of 1932 makes registration of a partnership firm optional. However, it is possible to do so in order to reap the benefits of Registration. It is up to the partners to register the firm, and there are no repercussions for failing to do so.

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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 partner or registered corporation may breach a contract by using a third party. The partnership firm cannot sue a third party if the company is not registered, but the third party may sue the firm instead. Additionally, the unregistered business or its partner cannot use set-off in the event of a dispute with a third party.

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 notarised 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 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?

When a partnership dissolves, the certification of incorporation might be invalidated in many ways. If all or all but one partner is declared bankrupt, or if the business engages in illegal activity, the firm may be dissolved immediately.

When do partners need to apply for partnership company registration?

A partnership firm can be registered at the moment of its formation or at any time thereafter. However, it is suggested that the firm be registered as soon as possible once the business begins in order to take advantage of the privileges that can only be enjoyed 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 of 1932 allows for but does not require the establishment of a partnership firm. Although it is not necessary to register a partnership business, doing so does come with a number of benefits under the Partnership Act. Therefore, by establishing a partnership business, the company and its members are protected from the effects of not registering.