Firm registration refers to the process of legally establishing a business entity as a partnership firm. A partnership firm is a type of business entity where two or more persons come together to carry on a business and share profits and losses.
The registration process for a partnership firm involves the following steps:
- Select a name for the firm: The partners must select a unique name for the firm that is not already in use by another business entity.
- Prepare a partnership deed: A partnership deed is a legal document that outlines the terms and conditions of the partnership, such as the name of the firm, the nature of the business, the capital contribution of each partner, the profit-sharing ratio, etc.
- Get the partnership deed notarized: The partnership deed must be notarized by a notary public to make it legally enforceable.
- Apply for PAN and TAN: The partnership firm must obtain a PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) from the Income Tax Department.
- Register the firm: The partnership firm must be registered with the Registrar of Firms in the state where the business is located.
- Obtain necessary licenses and permits: Depending on the nature of the business, the partnership firm may be required to obtain various licenses and permits from the local, state, and central government authorities.
Once the partnership firm is registered, it can legally carry on its business activities, open a bank account in the name of the firm, and enter into contracts with customers, suppliers, and other business entities. It is important to comply with all the applicable laws and regulations, file the necessary tax returns, and maintain proper books of accounts to avoid any legal or financial implications.