Service
A simple, traditional structure for two or more individuals running a business together — registered with the Registrar of Firms under the Indian Partnership Act, 1932.
A partnership is a relationship between individuals who have agreed to run a business together on terms of mutual understanding — sharing profits, liabilities, and responsibilities.
Partnership firms are registered with the Registrar of Firms of the state in which the firm is located. Registration is not strictly compulsory, but is strongly recommended: an unregistered firm cannot enforce contractual rights in court against third parties or partners, which materially weakens its commercial standing. Partners may apply for registration at the time of formation or at any later date during the firm's operation.
The cornerstone of every partnership is the Partnership Deed — a written agreement setting out the rights, duties, profit shares, and obligations of each partner. We draft this deed for you, since well-drafted terms prevent the great majority of disputes that arise between partners later on.
Structure
A partnership formed without any agreed term or duration. Any partner may dissolve the firm at any time by giving written notice to the other partners — making this the most flexible, but also the least stable, form of partnership.
A partnership formed for a specific venture, undertaking, or fixed period. The firm dissolves automatically once the venture is complete or the term ends — useful for project-specific collaborations.
Roles
Takes an active part in the day-to-day conduct of the business. Has full authority to bind the firm, and is liable to third parties for the firm's acts.
Contributes capital and shares profits but does not take part in management. Liable to third parties along with the other partners, but typically without operational involvement.
Lends only their name to the firm, without contributing capital or sharing profits. Despite this, they remain liable to third parties who dealt with the firm believing them to be a partner.
A person who, by words or conduct, allows themselves to be represented as a partner — and is therefore liable to anyone who, in reliance on that representation, gives credit to the firm.
Why a partnership
Forming a partnership is straightforward compared to other structures. The firm can be set up by drafting the Partnership Deed and entering into the partnership agreement — no other incorporation documents are required.
Partners do not need a Digital Signature Certificate (DSC) or Director Identification Number (DIN) — both of which are mandatory for company directors and LLP designated partners. Annual filings are also far lighter.
There is no separation between ownership and management. Partners take decisions together and implement them immediately — useful for businesses where speed of execution matters more than formal governance.
Partners bring complementary capital, networks, and expertise to the firm. This makes a partnership well-suited to professional services and businesses where multiple skill sets are essential.
There is no statutory minimum capital requirement. Partners contribute whatever amounts they agree on, in cash or kind, as set out in the Partnership Deed.
A registered partnership is taxed as a separate entity at a flat rate, but the share of profit distributed to partners is exempt in their personal hands — avoiding the double-taxation that can affect company structures.
Process
Partners may choose any name for the firm, provided it is not too similar or identical to an existing firm carrying on the same business. We conduct a basic search to flag obvious conflicts before you commit to a name.
Our team drafts the Partnership Deed setting out the partners' contributions, profit-sharing ratios, roles, decision-making procedures, admission and retirement of partners, and dispute-resolution mechanisms. The deed is executed on stamp paper of the value prescribed by your state.
We submit the application form to the Registrar of Firms of the state in which the firm is situated, along with the prescribed fees and stamp duty. The forms are duly attested by all partners. Stamp duty cost depends on the number of partners in the firm.
Once the Registrar is satisfied with the application and supporting documents, the firm is recorded in the Register of Firms and a Registration Certificate is issued. The Register of Firms maintains up-to-date particulars of every registered firm.
Note: Registration may be carried out at the time of the firm's formation or at any later point during the continuance of the partnership business.
Compare structures
Choosing the right business structure has long-term consequences for liability, tax, and compliance. Here's how the five common Indian structures compare at a glance.
| Feature | Proprietorship | Partnership | LLP | Pvt. Ltd. Company | OPC |
|---|---|---|---|---|---|
| Number of persons | One | Two or more | Two or more | Two or more | One person + one nominee |
| Designation | Proprietor | Partner | Designated Partner | Director | Director |
| Name | As chosen | As chosen | Ends with "LLP" | Ends with "Private Limited" | Ends with "OPC Private Limited" |
| Registration | Shops & Establishment | Registrar of Firms | Registrar of Companies | Registrar of Companies | Registrar of Companies |
| Capital | No minimum | No minimum | No minimum | No minimum | No minimum |
| Legal status | Not separate | Not separate | Separate entity | Separate entity | Separate entity |
| Liability | Unlimited | Unlimited | Limited | Limited | Limited |
| Audit | Above ₹1 crore turnover | Above ₹1 crore turnover | Contribution > ₹25 lakh or turnover > ₹40 lakh | Compulsory | Compulsory |
| Compliance | Least | More than proprietorship | More than partnership, less than company | Most | Less than company |
| Filing of resolution | No | No | No | Yes | Yes |
| Taxability | Slab rates | Slab rates | 30% + surcharge + cess; profit distribution not taxed | 30% + surcharge + cess; profit distribution taxed | Comparatively higher |
| Meetings | Not mandatory | Not mandatory | Not mandatory | Mandatory | Mandatory |
| Credibility | Lower | Lower | Mid | High | High |
| Dissolution | Easy | Easy | Less complex than company | Complex | Complex |
| Governing law | Not separate; no specific Act | Partnership Act, 1932 | LLP Act, 2008 | Companies Act, 2013 | Companies Act, 2013 |
Indicative comparison only. Specific tax and compliance positions depend on facts; please obtain advice for your matter.
Tell us about your partners and the business you intend to carry on. We'll come back with a clear, fixed-fee proposal within one working day.