Currently, the business environment of the business is constantly evolving. Forming a partnership in Kerala is a popular choice. The state of Kerala is known for its growing economy, robust business environment, educated population, and dynamic surroundings. The Gross State Domestic Product (GSDP) of Kerala for 2024-2025 is expected to be Rs. 13,11,437 crores. The growth rate from 2023 is 11.7%. One of the essential services that facilitate business formation in Kerala is EGROOPS. It is a prominent platform designed to streamline the registration process for partnership firms in Kerala.
In this blog, we will explore the partnership firm registration process in Kerala via EGROOPS, its benefits, legal requirements, procedure, and shared queries regarding the process.
What is EGROOPS?
EGROOPS is an online service platform that assists entrepreneurs in registering Societies and Partnership Firms in Kerala. The website was designed and developed by the Centre for Development of Imaging Technology (C-DIT). It simplifies the registration process by offering an easy-to-use interface, detailed guidance, and expert consultation.
What is a Partnership Firm?
A partnership firm is a type of business structure where two or more individuals come together to carry on a business for mutual profit. The partnership agreement outlines the partners’ profit and loss, as well as their roles and responsibilities in the firm.
In Kerala, like in the rest of India, a partnership firm can be registered under the Indian Partnership Act of 1932. A partnership firm can either be registered or unregistered, but a registered partnership offers several advantages, such as legal protection, easy access to funding, and smoother dispute resolution.
Legal Aspects of Partnership Firms in Kerala
Here are some key legal aspects to keep in mind while registering a Partnership Firm in India:
- Indian Partnership Act, 1932: Partnership firms in Kerala are governed by the Indian Partnership Act, 1932. The act outlines the legal framework for forming, registering, and operating a partnership firm.
- Liability of Partners: In a partnership firm, partners have joint liability for the firm’s debts and obligations. This means that if the business faces any financial difficulties, all partners are responsible for clearing the debts.
- Profit and Loss Sharing: The sharing of profits and losses must be clearly mentioned in the Partnership Deed/Agreement. In the absence of an agreement, profits and losses are shared equally by the partners.
- Dissolution of Partnership: A partnership firm can be dissolved as per the terms of the Partnership Deed/Agreement or upon the mutual consent of the partners. It is advisable to define the terms of dissolution in the partnership deed/agreement to avoid any future conflicts.
Why Register a Partnership Firm in Kerala?
Kerala offers numerous advantages to entrepreneurs who want to start a partnership firm. Some of the benefits are mentioned below:
- Legal Protection: Registered partnership firms have legal recognition, which reassures the existence of the Partnership in the eyes of the law and the people.
- Better Business Operations: Registration of a partnership firm allows the firm to open a separate bank account, obtain loans on behalf of the firm, and enter into contracts on behalf of the firm’s name, enhancing the firm’s operational capacity.
- Tax Benefits: Registered firms enjoy certain tax advantages, such as eligibility for tax exemptions and reductions available under the Income Tax Act of 1961.
- Credibility: A registered firm is more credible with customers, suppliers, and business partners than an unregistered firm.
- Capital Access: A registered partnership firm can raise capital more easily through external funding, whether loans, investors, or other funding mechanisms, than an unregistered firm.
Documents Required for Partnership Firm Registration in Kerala
You need the following set of documents in order to register a partnership firm in Kerala:
- Partnership Deed – It must be carefully drafted and signed by all the partners in a firm.
- Identity Proof of Partners – Aadhar card, PAN card, passport, or voter ID of all partners.
- Address Proof of Partners – Utility bills, bank statements, or government-issued documents confirming the address.
- Firm’s Office Address Proof – Rent agreement or lease deed or sale deed of the office address of the firm.
- Passport-sized Photographs – Recent passport-sized photographs of all partners.
- Signed Application Form – Form A, duly filled, read, and signed by all partners.
The Partnership Firm Registration Process in Kerala
Registering a partnership firm in Kerala is a simple process. EGROOPS makes this process even easier. The key steps involved in partnership firm registration are:
1. Choose the Name of the Firm
Choosing a name for a business is the first step in registering a partnership firm. The name must be distinct and unique and should represent the firm. Make sure that the name is not the same as any already-registered brand or trademark. To ensure the suggested name is available, you are advised to perform a name search. EGROOPS can help you help you with the process and avoid any future legal issues.
2. Draft a Partnership Deed
Once you choose the name of the Partnership Firm, the next step is to draft a Partnership Agreement. A partnership deed/agreement is a written agreement between the partners. It outlines the terms and conditions of the partnership. Partnership Deed includes:
- The name and address of the firm
- The names and addresses of all partners
- The nature of the business
- The profit-sharing ratio
- Duration of the partnership (if applicable)
- Responsibilities and powers of each partner
- Procedure for dispute resolution
- Terms of dissolution
While a partnership deed is not mandatory for an unregistered firm, it is strongly recommended to avoid future disputes. All the partners should sign the deed, and EGROOPS provides expert assistance in drafting this document.
3. Apply for Partnership Firm Registration
Once you have finalised the partnership deed, the firm can apply for registration with the local Registrar of Firms in Kerala. The registration application requires the following documents:
- Duly filled registration form (Form A)
- The signed partnership deed
- Identity proof (Aadhar card, Passport, etc.) and address proof (utility bill, rental agreement, etc.) of all partners
- Passport-sized photographs of all partners
- Proof of the firm’s office address (such as a rent agreement or ownership document)
4. Submit the Application and Documents
File the application form, along with the necessary documents, with the Registrar of Firms in the relevant district in Kerala. EGROOPS helps facilitate this process and ensures that all the forms are correctly filled out and submitted.
5. Issuance of Registration Certificate
Once the Registrar of Firms verifies all the documents, the partnership firm will be officially registered, and a Partnership Registration Certificate will be issued. The Registration Certificate serves as proof of the legal existence of the partnership firm.
Key Benefits of Partnering with EGROOPS for Registration
EGROOPS offers several benefits to entrepreneurs looking to register their partnership firms:
- Expert Consultation: EGROOPS provides expert consultation to ensure that your business complies with the applicable laws and regulations.
- Easy Process: The EGROOPS platform simplifies the registration process, providing step-by-step guidance.
- Help with Document Draughting: EGROOPS can draft a professional partnership deed and take care of all legal formalities. Fast Process: EGROOPS ensures that your registration process is finished quickly, cutting down on the time it takes for approvals. Reasonably priced services: EGROOPS ensures that business owners can register their partnership firms without going over their budget.
- Post-Registration Services: Following registration, EGROOPS helps you follow up by helping with tax filings, GST registration, and other laws.
Conclusion
From registration convenience to legal protections, there are several benefits to registering a partnership firm in Kerala through EGROOPS. By taking the proper actions, such as creating an explicit partnership agreement and fulfilling all legal obligations, business owners can establish an efficient and compliant company. EGROOPS is a reliable resource that offers knowledgeable direction and assistance to people navigating the procedure. Working with EGROOPS can significantly expedite your business registration process, regardless of your level of experience as an entrepreneur or as a first-time owner.
Frequently Asked Questions
1. What is the minimum number of partners required to form a partnership firm in Kerala?
The minimum number of partners required is two. There is no maximum limit.
2. Is it mandatory to register a partnership firm?
No, it is not mandatory, but it is highly recommended for legal protection and operational advantages.
3. How long does it take to register a partnership firm in Kerala?
The registration process typically takes 7 to 10 working days, depending on the completeness of your application.
4. Can a foreign national be a partner in a Kerala-based partnership firm?
Yes, foreign nationals can be partners, subject to the conditions outlined in the Foreign Exchange Management Act (FEMA).
5. What happens if the partnership firm is not registered?
If the firm is not registered, it may face difficulties in entering into contracts, securing loans, or resolving disputes legally.
6. Can the partnership deed be amended?
Yes, the partnership deed can be amended if all partners agree. Any changes must be documented and signed.
7. Do I need an advocate to draft the partnership deed?
It is not mandatory, but having an advocate draft the Partnership Agreement/Deed is advisable to ensure that all legal aspects are covered.
8. What are the documents required for a partnership firm registration?
Identity and address proofs of partners, office address proof, and a signed partnership deed.
9. Can the partners change the profit-sharing ratio?
Yes, the profit-sharing ratio can be changed, but this needs to be reflected in an updated partnership deed.
10. What is the cost of registering a partnership firm in Kerala?
The cost varies, but EGROOPS offers affordable packages for seamless registration. You can inquire about the specific pricing from their platform.
