Registration of a partnership firm is optional. The firm exists the moment the partners agree, and it can trade lawfully without ever going near a Registrar. What registration buys is the ability to enforce your contracts, because Section 69 bars an unregistered firm from suing a third party and bars a partner from suing the firm or a co-partner. Your right to be paid survives non-registration. Your ability to do anything about it does not.
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Government fee — paid by you at actuals
Stamp duty on the partnership deed is a state charge paid by you at actuals, and it is structured differently from state to state, flat in some and linked to capital contribution in others. For that reason no figure is quoted here and none should be: we tell you the number for your state before the deed is executed. Registrar of Firms filing fees are also state-set and modest. PAN and TAN applications carry nominal charges, and GST registration carries no government fee.
Every price above is a professional fee, excluding GST and government charges. 50% on delivery.
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Partnership against LLP, on liability rather than on cost. A partnership has no annual return to any registrar and can use presumptive taxation, which an LLP cannot. An LLP caps each partner's liability, and its Form 8 and Form 11 penalties run at Rs 100 per day per form with no ceiling.
Remuneration and interest clauses that satisfy Section 40(b), because an unquantified clause loses the entire deduction. Then the clauses most templates omit: what happens when a partner dies, retires or is admitted, how disputes are resolved, and how a share is valued on exit.
Stamp duty is a state charge and varies in structure, so we give you the figure for your state before execution rather than after. The deed is then executed and notarised.
Optional in law, and the reason to do it now rather than later is that the firm must be registered on the date any suit is instituted. Registering after a dispute does not revive a barred claim.
TAN from the outset, because the firm has to deduct 10 per cent on payments and credits to its own partners once a partner crosses Rs 20,000 in the year. Then GST and Udyam where they apply, and the books and invoicing set up.
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An unregistered firm cannot sue a third party on a contract, a partner cannot sue the firm or a co-partner, and the bar extends to a claim of set-off. The right to be paid survives. The ability to enforce it does not.
The firm must be registered on the date the suit is instituted. Registering after the dispute arises does not revive a claim you were already barred from bringing, which makes this insurance with a hard deadline rather than a formality.
The 1984 amendment inserting Section 69(2A) was struck down as unconstitutional by the Supreme Court in V. Subramaniam v. Rajesh Raghuvandra Rao. Guidance still calling it mandatory there is citing law that has been set aside.
10 per cent on salary, remuneration, commission, bonus and interest once a partner crosses Rs 20,000 in the year, on the whole amount, at credit as well as payment, with no turnover threshold. Most firms now need a TAN from day one, and many do not have one.
Section 40(b) limits were doubled to Rs 3,00,000 or 90 per cent on the first Rs 6,00,000 of book profit. Older deeds that hard-code the previous figures cap the firm below what the law allows and hand the difference to tax every year.
If the deed does not authorise remuneration, or does not quantify it or give a method to determine it, the entire deduction goes regardless of amount. That is a drafting failure rather than a tax one, and it is the argument for a CA over a template.
