The partnership firm is governed by the Indian Partnership Act, 1932. It is optional and completely depends on the discretion of the partners to register the firm. The registration of the partnership firm can be done anytime either at the start of the business or anytime during the continuation of the business.
However, a registered firm enjoys certain rights that are not available for an unregistered firm. There are two types of partnership firms i.e. registered and unregistered.
Types of partners
Following are types of partner as per the extent of their liabilities in partnership:
- ACTIVE PARTNER: These partners become the partner by an agreement and they take active participation in the day-to-day activity and business of the firm. Active partners must give public notice when willing to retire.
- DORMANT OR SLEEPING PARTNER: This partner doesn’t actively participate in the daily functioning of partnership. He is though bound by the actions of all the partners. He needs not to give public notice for his retirement. Capital Contribution and profit-sharing are similar to those of other partners.
- NOMINAL PARTNER: These partners only lend their name to the firm as a partner. They don’t contribute to capital nor have any share in profit.
- PARTNER IN PROFIT: These partners will share profits only. They are not liable for any loss.
- MINOR PARTNER: A Minor cannot enter into a contract thus accordingly he can’t be a partner; however he can be admitted to the benefits of partnership firm with the consent of all the partners.
Naming conventions for a Partnership Firm
Any name can be given to a partnership firm as long as the below-mentioned conditions are fulfilled.
- There is no such restriction in choosing the Name of the Firm.
- The Name shouldn’t be from any of the existing Popular Brands or Trademarks.
- The name of the partnership firm should be limited to the name of the owner or accomplices.
- The name should not contain a minimum of two words.
A partnership firm is established with two or more partners with the aim to make a profit. Registration is not mandatory for such firms. However, a registered partnership firm enjoys certain benefits.
For further clarifications regarding partnership registration, call us at +91-9900328729.