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A quick, low-cost way to run a business together

We draft a clear partnership deed, register your firm and get PAN and a bank account ready.

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What a partnership firm is What the partnership deed should cover Documents and steps Strengths and limits How it compares Common questions

What a partnership firm is

Two or more people agree to share profits from a business, run on the terms of a partnership deed under the Indian Partnership Act, 1932. The firm is not a separate legal person, so partners share unlimited and joint responsibility for its debts.

Key features

At least two partners, with a limit of 50
Written deed is strongly advised even if an oral agreement is legally possible
Registration with the Registrar of Firms is optional
Profit sharing as agreed in the deed
Simple to start and close

Where it works

Family businesses and small traders
Local shops and service firms
Professionals who prefer minimal formalities
Short-term joint ventures

What the partnership deed should cover

Name and address of the firm and its business
Names, addresses and roles of all partners
Capital contributed by each partner
Profit and loss sharing ratio
Salary and interest on capital, if any
Banking and signing authority
Rules on admission, retirement and exit
Dispute resolution and dissolution terms

Documents and steps

PAN and Aadhaar of all partners
Address proof and photographs
Proof of the firm’s business address
Draft partnership deed on stamp paper
Application to the Registrar of Firms if registering

Decide the termsAgree on capital, ratios and responsibilities.
Draft and sign the deedWe prepare it and get it executed on stamp paper.
Register the firmFile with the Registrar of Firms for added protection.
Get PAN and bank accountApply for the firm’s PAN and open a current account.

Strengths and limits

Advantages

Low set-up cost and light compliance
Flexible management
Profit sharing tailored to contribution

Things to weigh

Unlimited personal liability for every partner
Unregistered firms face limits when suing third parties
Difficult to raise outside equity
Firm may end on a partner’s exit unless the deed says otherwise

Thresholds, fees and rules are set by the Ministry of Corporate Affairs and other regulators and change by notification. We confirm the current position before filing.

How it compares

	Private Ltd	LLP	OPC	Partnership	Proprietorship
Owners	2 to 200 shareholders	2 or more partners	1 member plus nominee	2 or more partners	1 person
Separate legal entity	Yes	Yes	Yes	No	No
Owner liability	Limited to shares	Limited to contribution	Limited to shares	Unlimited	Unlimited
Raising equity	Easy	Limited	Limited	Limited	Not possible
Compliance load	Moderate to high	Moderate	Lower than Pvt Ltd	Low	Very low

Common questions

Is registration compulsory?

No, but an unregistered firm has restricted legal remedies against third parties, so registration is wise.

Can a company or LLP be a partner?

Rules differ. Ask us for your situation before drafting.

How is the firm taxed?

As a separate taxpayer at the applicable partnership rate, with permitted deductions for partner salary and interest.

What if a partner leaves?

The deed should say whether the firm continues and how the exiting partner is paid.