The Indian Partnership Act of 1932 governs and regulates partnership firms in India. A partnership firm is made up of people who work together as partners. The company is established by a partnership agreement between partners. The partners’ interactions with one another and the partnership firm are governed by an agreement between them known as a partnership deed. The Act establishes the role of a partner and a general partnership in relation to third parties in contractual and legal relationships arising from and during the operation of a partnership firm. The various facets of managing a civil partnership in India are examined in depth in this article.
Rules for the Name of a Partnership Firm in India
Partnership firms are not separate legal entities, despite the fact that their partners are. A partnership firm registration does not permit being a creditor, debtor, or property owner. According to the law, the partners own the assets, obligations, and credit of a partnership registration firm. To avoid misunderstandings in the future, the general partnership agreement must expressly specify how the partners will divide profits and losses. When conducting business, each partner is permitted to act on behalf of the other.
When choosing a name for a corporation, a partnership deed must adhere to a number of rules and regulations. The following are the guidelines:
A partnership firm’s name must be one of the proprietors’ or accomplices’ names or a name that has already been used. The members’ names as they appear in the Register of Members may be included in the name list. A partnership firm’s name should not violate the emblems and names (Prevention of Improper Use) Act or any amendment or reauthorization of that Act. The words “and Co.,” “and Company,” or “and Associates” may be added as a suffix to the partnership firm However, a name for a partnership firm may also be accepted without the postfixes “and Co.,” “and Company,” or “and Associates,” if the partners’ full first names, full middle names, and possibly even full surnames are used.
The Council will not accept any postfixes that it deems undesirable. Names like “Fire,” “Leader,” “Supremacy,” “Smash,” “Mastermind,” “Super,” and so on are examples of names that are not acceptable. “and” or “and” must also be used between the accomplices’ full first names, full center names, or possibly entire surnames. Any party or individual may use a partnership firm name that has already been used by a partner or individual if the firm’s status changes from singular to organizational, or vice versa, provided that neither partner nor individual objects. For three years following the firm’s dissolution, no party or individual may use a partnership firm name that was being used by the owner or partners. for partnership firms are not allowed.
The part’s name, middle name, and surname will change to match the names, middle names, and surnames The name may be given to a related group or individuals for up to three long periods following the closure of the business. If the name of a honing part is removed after three years, the stated exchange or firm may be open to anyone who is eligible for a share of such name under the regulations. Any reconfiguration of the firm under a similar firm name will not have any effect unless the Council gives its prior approval by Regulation 170.
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What is the Process of Partnership Registration?
The process by which partners register a partnership firm with the Registrar of Firms is known as partnership registration. The partners should register the company with the state’s firm registrar. Since a company does not have to be registered, the partners can do so when the company is formed or while it is still in business.
To register a partnership, two or more people must join forces as partners, select a business name, and sign a partnership deed. However, partners cannot be members of Hindu Undivided Families or spouses.
Name of the Partnership Firm
A partnership firm can be called anything as long as the following conditions are met:
The name should not include words like “empire,” “crown,” “emperor,” or “empress” or any other phrases that suggest government support or endorsement. It should also not be too similar to the name of a company that is already in the same industry.
What disadvantages might an unregistered partnership company have?
Even if the partnership firm is not registered, the aforementioned company’s partners can still exercise their rights in accordance with the Indian Partnership Act of 1932. This means that the company in question cannot sue or make a set-off claim if there is a disagreement with a third party. However, the unregistered partnership firm may be sued by third parties.
It is subject to significantly fewer compliance requirements than a business or LLP. The designated partners or company directors of an LLP are required to have a Digital Signature Certificate (DSC) or Director Identification Number (DIN), but the partners are not. A partnership company’s decision-making process is swift due to the lack of distinction between ownership and management. The profits and losses of the business are divided equally among the partners. Even the amount of money the partnership firm wins and loses is up to them.