A Partnership Firm is where two or more persons come together with an agreement to form a business for a profit motive, wherein they decide to mutually share the profits and liabilities of the business. Persons who decide to enter into a partnership with one another are individually referred to as “Partners” and collectively a “Firm.” The name for firm registration is the name under which the firm carries out its business.
Procedure for Registering a Partnership Firm
- Application for Registration of firm – An application needs to be filed with the registrar of firms of the jurisdiction in which the firm is situated, along with the prescribed fees. This registration form is required to be attested and verified by all the partners. The application must contain the following details –
- The name for firm registration
- The principal place of business
- The location of all the places where the firm carries on business
- The date of joining of each partner
- The names and permanent addresses of each partner
- The duration of the firm.
The application can be sent to the Registrar of Firms through post or by physical delivery.
- Selection of a name for firm registration – Any name can be given to the partnership firm; however, it is subject to certain conditions. The first is that the name for firm registration shall not be similar or identical to an existing firm in the same business. Second, the name for firm registration shouldn’t contain words that portray the sanction or approval of the government.
- Draft the Partnership Deed – The deed among the partners of the firm consists of rights, responsibilities, and profit shares, along with all the necessary obligatory clauses. The agreement must be written and signed instead of an oral agreement to avoid future conflict. The necessary information to draft a deed is as follows:
- Name for firm registration, address, nature of business, date of establishment, capital invested, profit or loss division ratio.
- Interest-based on the capital investment of each partner
- Salaries, including all financial drawings by the partners
- Rights, Duties, and obligations of every partner specified by name
- Alignments in case of mishaps such as defaults or death of a partner
- All the clauses mutually decided among the partners
- Application for PAN – A firm has to apply for a Permanent Account Number to the Income Tax Department, irrespective of the registration. The PAN is a requirement to fulfill the obligation of paying taxes.
- Submit the Documents – The following documents are required to be submitted to the registrar as a part of the registration process:
- Application for registration of partnership (Form 1)
- A certified original copy of the partnership agreement
- Specimen of Affidavit
- PAN Card in the name of the partnership
- Proof of address of the partnership firm, ownership deed, lease and rent agreements, etc., are common acceptable documents.
- PAN Cards and address proofs of all the partners
- Pay the Fees and Stamp Duties – Registration Fees and Stamp Duty is required to be paid at the time of submission of the documents with the registrar. The registration is not complete until all dues are paid.
- Finalize the Deed – To legalize the Deed, it shall be provided to each partner on stamp paper; it should be attested by all the partners in front of the notary. The signed copy is thereafter submitted to the Registrar during the process of registration.
- Receiving the Certificate – Following all the above requirements, if the Registrar is satisfied with the application and the documents, he will register the firm in the Register of Firms and issue the Registration Certificate. The Register contains all the updated information of all the firms and can be viewed by anyone upon payment of the required fees. To know more about the process of registration, get online legal advice.
Conditions for Selection of Name for Firm Registration
Post knowing the procedure for registration, we know that selection of a name for firm registration is an important aspect of the entire incorporation procedure. Following are the conditions for the selection of a name for firm registration:
- Acceptable Name for Firm Registration – Any acceptable name for firm registration is divided into three portions, the name, the object, and the constitution. For example, Tata Motors Limited, Tata is the name, Motors is the object, and Limited is the constitution.
- Name Portion – This portion of the Name for firm registration must be unique and acceptable as defined by the LLP Act, 2008 and the Companies Act, 2013. If there exists a company with a certain name for firm registration and object, the same cannot be utilized for an LLP. Similar name for firm registration in similar industries are not allowed, nor is a name that is similar to an existing company.
- Object Portion – Every entity inclusive of a Pvt Ltd Company, One Person Company, Limited Company, and LLP shall include the object that transparently states the nature of business of the entity.
This portion identifies the purpose of the business activity being undertaken, for e.g., technology, textiles, motors, steel, restaurant, etc. A similar name with a different object can be allowed to be selected. However, names without an object or vague object shall not be allowed.
- Constitution Portion – This portion of the name identifies the nature of the entity, whether it is a Private Limited Company which is represented by Pvt Ltd Company, a One Person Company represented as an OPC, Limited Company as LTD Company, or a Limited Liability Partnership as an LLP.
Name For Firm Registration Availability Online
- Search on the MCA website for the availability of a name for firm registration.
- Enter the suggested name for firm registration in the space provided for inserting the company/LLP name and click on the search button.
- Following this, a list will be reflected on the website with similar names in existence.
- If there aren’t any names reflected, it means that the name for the firm registration proposed is unique, and there exists no similar named entity.
- Now one must also check the Trademarks in existence by going to the website of Public Search of Trade Marks or Search for “Trademark search India.”
- In the area provided for inserting the word mark, enter the proposed name.
- Then enter the relevant class by entering the class details in the class textbox. Class details can be accessed by clicking on class details and then click on the search button.
- Following this, a list will be reflected showing whether any trademark exists in the same name for firm registration or not. If not, then the name for firm registration is unique and not registered and can definitely be utilized and registered.
Guidelines for Selecting Name For Firm Registration
- The name for firm registration will be restricted to the names of the proprietor/partners or the name which is being used currently.
- The Partnership Firm could also incorporate the name of the members as and when they show up in the register of members for a name for firm registration.
- The name for firm registration, change in the name, or any re-authorization will not be contradictory to the arrangements of the names and emblems (prevention of improper use) act, 1950.
- The name chosen may have the suffixes “&Co.”, “& Company,” or “& Associates.” However, if the above-mentioned suffixes are considered unwanted, they will not be permitted by the council.
- “And” or “&” may be used interchangeably, where necessary.
- A Firm’s name, having no association with the names of its members, will not be permitted.
- In case of restructuring the status of the firm from a singular entity to an organization firm or vice versa, the name for firm registration being used could be continued provided there is no objection from any of the members associated with it.
- Any reconstitution of the firm with a similar name for firm registration shall not have an impact aside from the earlier endorsement of the council as per Regulation 170.
Registration of the Firm is highly recommended, even though it’s not a legal mandate. The selection of a name for firm registration is a must. The name for firm registration provides clarity and conveys the object and constitution of the entity. Registration enables the partners to file a case against third parties and other partners. Hence selection of a name for firm registration is important.
For registration, it is very essential that an adequate and appropriate name for firm registration is selected, and that can only be done if the individual is aware of the procedure and the conditions relating to the selection of the name. Hence these key points enable one to make a better decision in the selection of a name for firm registration. To know more, contact a lawyer online.