To carry on a business if any Persons who have entered into partnership with one another are called “Partners“; conjointly called as a “Partnership Firm”; and the name under which their business is carried on is called the “ Partnership Firm Name”

Any individual’s/companies/firms/trustees at least two of which are necessary to constitute a partnership Firm. 

Indian Partnership Act 1932 – It does not contain anything about the maximum number of partners in Partnership firm. However the Companies Act 2013 mentioned that the limit of maximum number of partners for any business is limited to the extent of only 100 Persons.

Hence, limits specified under companies Act should be regarded as the maximum limits to the number of partners in a partnership firm. Further there are certain advantages and disadvantages also they are in a partnership firm.

1. Less Legal Obligations and Compliances

2. Minimum external regulations leads to better decision making

3. Easy Access to the Profit arising out of the Firm

4. More Partners means more capital

1. Losses are unlimited and partners will personally liable for the losses

2. Not a Separate Legal entity

3. Limited to access capital ( Only from Partners)

4. Less Tax Relaxation

The Constitution of a partnership firm is easy as compared to the other forms of business organisations. The partnership firm can be constituted by drafting the partnership deed and entering into the partnership agreement. Only partnership deed and no other documents are required to constitute Partnership Firm. It need not mandatory be registered with the Registrar of Firms. A partnership firm can be incorporated and registered at a later date voluntarily.

1. KYC of Proposed Partners. 2. Proposed name of the Firm. 3. Nature and objectives of the business. 4. Principle Place of business/ Registered Office. 5. Date of commencement of business. 6. Amount of Capital Contributed by each partner. 7. Profit and Loss sharing ratio among the Partners. 8. Other Specific conditions as may be mutually agreed by the partners

After entering in to the agreement by the Partners they can voluntarily register their firm with registrar of Firms of the state and an application form is required to be filed to the Registrar of Firms of the State/Area in which the firm is situated along with fees as may be prescribed. 

The application for registration has to be signed and verified by all the partners. 

The application of Registration can be sent to the Registrar of Firms through post or by physical delivery, which contains the following details:

1. The name of the firm.

2. The principal place of business of the firm. (If Premises is rented than rent agreement )

3. The location of any other places where the firm carries on business.(if any)

4. The date of becoming a partner

5. The names and permanent residential addresses of all the partners.

6. The duration of the firm from the date of constitution.

Note: Above Registration can be done even after commencement of business it is not mandatory but voluntarily registration of firm is treated as good practice in legal and Finance world. It is even helpful for avail any credit facility from banks and any financial institutions.