Jammu and Kashmir Partnership Firm Registration

In India, the two most leading forms of business organisations are the Partnership and Proprietorship firms. This is because the total number of statutory compliance required to set up these firms is less when compared to the number of statutory compliance required to set up a Limited Liability Partnership (LLP) or a company. A partnership firm is a business organization that is constituted by two or more individuals, abiding by the rules and regulations set in the Partnership Deed. In a firm, all partners can share the profits and the loss at an agreed rate. In this article, we look at the procedure for Jammu and Kashmir partnership firm registration.

Registration of Partnership Firms

The Indian Partnership Act, 1932 regulates all partnership firm registration. The act states that the registration of a partnership firm is not mandatory, and it is up to the members to register their firm. Partnership firms are registered before starting the business or anytime during the continuance of the firm. However, if a firm is not registered, it is denied to form certain benefits.

Need for Registration

The state's Registrar of Firms (ROF) will have to register the partnership firm. By registering a firm, people can join to run the business and to continue with the legal bindings and share their profits according to their rules laid by them.

Partnership Deed

A business document for the partners where the rights and regulations of a firm are written is called a Partnership Deed. All partnership deeds have to be written since verbal partnership deeds cannot be used for taxation purposes. The following are the mandatory details that have to be mentioned in a partnership deed.

Details of all the partners in a firm
Nature of business of the firm
Date of commencement of the firm
Duration of Partnership
The capital contribution made by each partner
Profit and loss that has to be shared among the partners

Besides this, additional clauses in a deed are as follows.

Interest on the Partner's Capital, Partner's Loan and interest have to be charged on the drawings.
Salaries, commissions, etc. for the partners.
Methods to prepare accounts and to make arrangements for audits.
Divisions of tasks and responsibilities such as duties, powers and obligations of all partners.

Retirement, death and admission of a partner When a partner retires, passes away or to add a new member, a partnership deed has to be created in a stamp paper with the Indian Stamp Act. Every new partner should possess a copy of the partnership deed.

Partnership Name

The partners of a firm can choose any desired name for their firm. However, certain limitations have to be followed while selecting a name for a firm.

The desired name should not be identical or sound similar to an already existing firm that runs a business that is more or like to an already existing business. This is to avoid any kind of confusion that affects the reputation of the firm.
The proposed name should not contain terms like Crown, Emperor, Empress, Empire or terms that signifies sanctioning, approving or patronage of a government. In exemption cases, these terms can be used when the State Government permits the firm to use such names.