Partnership Firm Registration in India (2026): Deed, Registrar of Firms, Stamp Duty and Section 69

A partnership firm is still the quickest way for two or more people to start a business together in India. There is no ministry filing and no annual return to a registrar. You need a partnership deed and, ideally, registration with your state's Registrar of Firms. This guide is for traders, contractors, family businesses and small manufacturers who are setting up a firm or have run one unregistered for years. It explains what registration does (and what happens if you skip it), what goes into the deed, how stamp duty works, how the Registrar of Firms process runs in several states, and how PAN, GST and Udyam fit around it.

Quick answer

Sign a partnership deed on stamp paper at your state's rate, then file Form 1 (Form A in some states) with the Registrar of Firms for the district or state, together with the deed, partners' IDs and proof of business address. Registration is optional under the Indian Partnership Act, 1932. Without it, section 69 stops the firm suing customers on contracts and stops partners suing each other. State fees are small: Telangana charges ₹200 + ₹45 user charges.

• Minimum 2 partners, maximum 50

• Register any time: there is no deadline, but register before you need to enforce a contract

• Stamp duty on the deed is a state levy: Maharashtra caps it at ₹50,000

• The firm gets PAN, GST and a bank account on the deed, registered or not

What is a partnership firm?

Section 4 of the Indian Partnership Act, 1932 defines partnership as "the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all". The people are individually "partners" and collectively a "firm", and the name under which they trade is the "firm name". Three elements must be present. There must be an agreement (written or oral), a business, and the sharing of profits, with the business carried on by all the partners or by some of them acting for the rest. Co-owners who simply share rent from a property are not partners.

A firm is not a separate legal person the way a company or LLP is. Each partner is an agent of the firm, and every partner is jointly and severally liable, without limit, for the firm's debts incurred while they are a partner. A supplier who is owed ₹10 lakh can recover the whole amount from any one partner's personal assets. That partner then claims a contribution from the others. This unlimited liability is the main reason growing firms later convert into an LLP.

Who can be a partner. Any person competent to contract: individuals, and companies or LLPs through their authorised representatives. A firm cannot be a partner in another firm, because it is not a legal person; the Karnataka IGR FAQ notes this too. A minor cannot be a full partner but can be admitted to the benefits of partnership with all partners' consent. The maximum is 50 partners under section 464 of the Companies Act, 2013 and rule 10 of the Companies (Miscellaneous) Rules, 2014. Some state FAQs still quote the older limits of 10 for banking and 20 for other business, but those came from the 1956 Companies Act and no longer apply.

Partnership firm basics (2026)

2

Minimum partners

50

Maximum partners

Companies Act s.464

No deadline

Time limit to register

s.58 — any time

30% (plus surcharge and cess)

Income-tax rate

flat, on firm profits

Is registration compulsory? What section 69 really means

Registration is not compulsory. Section 58 says a firm "may" be registered at any time. Karnataka's Department of Stamps and Registration confirms there is no time limit. But an unregistered firm faces three disabilities under section 69:

1. No suits between partners and the firm. A partner cannot sue the firm or another partner to enforce a right under the contract or the Act unless the firm is registered and the partner is shown in the Register of Firms.
2. No suits against third parties. The firm cannot sue a customer, supplier or anyone else to enforce a contract unless it is registered and the people suing are shown as partners in the Register.
3. No set-off claims. The same bar applies to a claim of set-off and other proceedings to enforce contractual rights.

There are exceptions. A partner can still sue to dissolve the firm or for accounts of a dissolved firm, and can enforce the right to realise its property. Official assignees in insolvency keep their powers. The section also does not apply to firms with no place of business in the territories the Act covers, or to small-cause claims not exceeding ₹100. Third parties can always sue an unregistered firm. The disability runs one way only.

In practice: if a customer does not pay ₹6 lakh for goods you supplied, an unregistered firm cannot file a civil recovery suit on that contract. Registering after the dispute arises does not revive a suit filed before registration. That is why the safest time to register is at the start, and why banks and large buyers often ask for the registration acknowledgement.

Registered vs unregistered partnership firm

Point	Registered firm	Unregistered firm
Sue customers/suppliers on contracts	Yes	No (s.69(2))
Partner sues firm or co-partner	Yes	No, except for dissolution and accounts
Can be sued by others	Yes	Yes
PAN, GST, bank account	Yes	Yes, on the deed
Proof of constitution and partners	Register of Firms entry and acknowledgement	Deed only
Changes to partners or address	Must be notified to Registrar (s.60–63)	Only deed amendments
Cost	Small state fee plus deed stamp duty	Deed stamp duty only

Sue customers/suppliers on contracts

Registered firm

Yes

Unregistered firm

No (s.69(2))

Partner sues firm or co-partner

Registered firm

Yes

Unregistered firm

No, except for dissolution and accounts

Can be sued by others

Registered firm

Yes

Unregistered firm

Yes

PAN, GST, bank account

Registered firm

Yes

Unregistered firm

Yes, on the deed

Proof of constitution and partners

Registered firm

Register of Firms entry and acknowledgement

Unregistered firm

Deed only

Changes to partners or address

Registered firm

Must be notified to Registrar (s.60–63)

Unregistered firm

Only deed amendments

Cost

Registered firm

Small state fee plus deed stamp duty

Unregistered firm

Deed stamp duty only

The partnership deed: what it must contain

The deed is the contract between the partners. It is also the document the Income Tax Department, the GST department and your bank will ask for. Without a written deed, the Act's default rules apply: equal profit sharing, no salary or interest to partners, and every partner entitled to take part in the business. These defaults rarely match what the partners agreed orally.

A good deed covers:

• Name and principal place of business, and other places where the firm will operate.
• Nature of business. Keep it broad enough to cover likely expansion.
• Names, addresses and ages of the partners, and the date each one joins.
• Capital contribution of each partner, in cash or property, and how further capital is brought in.
• Profit and loss sharing ratio. Losses follow the profit ratio unless the deed says otherwise.
• Remuneration and interest on capital for working partners. Income-tax law allows these as deductions only if the deed authorises them and within its limits.
• Duration. The firm can be "at will" or for a fixed period or project.
• Banking authority: who can operate the bank account and sign cheques, and any limits.
• Admission, retirement, expulsion and death of partners, including how a leaving partner or their heirs are paid out.
• Books of account, the financial year, and who keeps the records.
• Dispute resolution, usually arbitration.
• Dissolution: the grounds and how assets are distributed.

The deed is signed by all partners, usually before two witnesses, and often notarised. Some states encourage or require registration of the deed itself at the sub-registrar's office. That is different from registering the firm: the Karnataka FAQ points out that registering the deed as a document "does not mean registration of firm".

Stamp duty on the partnership deed: state examples

The deed is an "instrument of partnership" and is chargeable to stamp duty under the state's Stamp Act. Each state sets its own rate, and an under-stamped deed cannot be used as evidence until the deficit and a penalty are paid. Buy e-stamp paper (SHCIL or your state's e-stamping system) or franked paper for the right amount before the partners sign.

• Maharashtra. Under article 47 of the Maharashtra Stamp Act, duty is ₹500 where cash contribution does not exceed ₹50,000. Above that it is ₹500 for every ₹50,000 or part of it. An ordinance dated 14 October 2024 raised the ceiling from ₹15,000 to ₹50,000. Contributions of property are charged as a conveyance on the property's market value, which can be much higher.
• Odisha. The IGR Odisha checklist asks for a partnership deed on non-judicial stamp paper of ₹200, properly registered or notarised.
• Karnataka. The IGR Karnataka FAQ lists ₹100 where capital does not exceed ₹500 and ₹500 otherwise. Karnataka revised many duties with effect from February 2024, so confirm the current article 40 rate at the sub-registrar before buying stamp paper.
• Other states generally charge a fixed amount for a simple deed, and higher duty where property is brought in. Check the schedule on your state's IGR or e-stamping portal.

Worked example (Maharashtra). Three partners in Nashik bring in ₹3 lakh, ₹2 lakh and ₹1 lakh in cash: ₹6 lakh in all. That is twelve blocks of ₹50,000, so duty is 12 × ₹500 = ₹6,000, well below the cap. If one partner instead contributes a shop worth ₹40 lakh, that portion is stamped like a conveyance at the applicable rate, which is a much larger amount. Many firms therefore keep property outside the firm and rent it to the firm instead.

How to register with the Registrar of Firms

Registration is done by filing a statement under section 58. It must state the firm name, the principal place of business, other places of business, the date each partner joined, the full names and permanent addresses of the partners, and the duration of the firm. All partners, or their specially authorised agents, sign and verify it. The firm name must not use words such as Crown, Emperor, Empress, Empire, Imperial, King, Queen or Royal, or words implying government sanction, unless the state government consents in writing. When the Registrar is satisfied, they record the firm in the Register of Firms (section 59) and issue an acknowledgement. From that date the firm is registered.

Partnership firm registration: the general process

1. 1

   Finalise and stamp the deed

   Agree the clauses, buy stamp paper at your state's rate, sign before witnesses and notarise if your state asks for it.

2. 2

   Check the firm name

   Avoid restricted words and names already used locally or registered as trademarks. A firm name gets no exclusive protection by itself.

3. 3

   Fill the application (Form 1 / Form A)

   Enter the s.58 particulars. In several states all partners' signatures must be attested by a gazetted officer, advocate, notary or chartered accountant.

4. 4

   Attach documents and pay the fee

   Attach a certified copy of the deed, partners' ID and address proof, proof of the business premises (rent agreement and NOC or ownership proof) and the fee receipt.

5. 5

   Submit online or at the district office

   Most states now take applications online. Some still need the originals delivered to the District Registrar.

6. 6

   Receive the acknowledgement

   The Registrar records the firm in the Register of Firms and issues the acknowledgement (Form C in Karnataka). Keep it with the deed.

How states differ. The Act is central, but each state runs its own Registrar of Firms and rules:

Ongoing changes are cheap too. Telangana's published charges for reconstituting a firm, changing its address or getting a certified copy are a few hundred rupees at most, and each is processed within about three working days once the originals arrive. Check your own state's portal for its forms. Names vary (Form 1, Form A, Form I), but the particulars are the same because they come from section 58.

Documents for firm registration

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• Application in the state's form (Form 1 / Form A / Form I), signed by all partners
• Partnership deed on correct stamp paper, signed, witnessed and notarised; plus a certified copy
• PAN and Aadhaar (or other ID) of every partner
• Address proof of every partner
• Proof of principal place of business: ownership document, or rent agreement and owner's NOC, plus a recent utility bill
• Affidavit or declaration verifying the particulars, if your state prescribes one
• Fee payment receipt (online challan or treasury receipt)

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After registration: changes you must report

A registered firm must keep the Register of Firms current. Section 60 covers changes in the firm name or principal place of business. Section 61 covers opening or closing a branch, and section 62 covers changes in partners' names or addresses. Section 63 covers changes in constitution, such as a partner joining or retiring, and the dissolution of the firm. A minor admitted to the benefits of partnership must also tell the Registrar whether they elect to become a partner on attaining majority.

Keeping the register up to date protects you. A retiring partner stays liable to third parties for the firm's later acts until public notice of retirement is given. Recording the change with the Registrar is part of that protection. Section 70 makes furnishing false particulars punishable with up to three months' imprisonment, a fine, or both.

PAN, bank account, GST and Udyam for a partnership firm

PAN. The firm applies for its own PAN online through the NSDL (Protean) or UTIITSL portals as a "Firm". The signed and stamped deed serves as proof of constitution. Registration with the Registrar is not required for PAN. A TAN is needed if the firm will deduct tax, for example on rent, contractor payments or payments to partners.

Bank account. Banks open a current account in the firm's name on the deed, the firm's PAN and the partners' KYC. Many also ask for the registration acknowledgement where the firm is registered. The deed's banking clause decides who signs.

GST. A firm needs GST registration once its aggregate turnover crosses ₹40 lakh for goods or ₹20 lakh for services (lower limits apply in special-category states). It needs registration regardless of turnover for inter-state supplies of goods or for selling through e-commerce operators. The application is made in the firm's PAN with the deed as constitution proof and an authorised partner as signatory; see our GST registration guide.

Udyam. Register the firm on the free Udyam portal with its PAN and the authorised partner's Aadhaar (Udyam registration). It is classified as micro, small or medium on its investment and turnover. Udyam opens MSME schemes and priority-sector credit, and lets the firm use the MSMED Act's 45-day payment protection against buyers.

Income tax. A firm pays tax at a flat 30% (plus surcharge and cess), with a 12% surcharge above ₹1 crore of income and 4% cess. Interest on capital and remuneration to working partners are deductible only within the limits in income-tax law, and only if the deed provides for them. Since April 2025 the firm must also deduct tax at source on such payments to partners above the threshold. Partners pay tax on that remuneration and interest, while their share of the firm's profit is exempt in their hands.

Setting up a new firm, in order

Step 1

Stamped partnership deed

Step 2

Registrar of Firms

Form 1 / Form A

Step 3

Firm PAN (and TAN)

deed as proof

Step 4

Current account

Step 5

Udyam

free

Step 6

GST

at threshold or inter-state

Common mistakes and how to fix them

Running for years on an oral agreement. Without a deed, you cannot claim partner remuneration as a tax deduction, banks will not open an account, and disputes fall back on the Act's equal-share defaults. Draft and stamp a deed now. It can record that the partnership began on an earlier date.

Registering only when a dispute starts. A recovery suit filed by an unregistered firm is not cured by registering afterwards. If you supply on credit, register at the start.

Wrong stamp duty. Buying ₹100 or ₹500 paper out of habit in a state that charges by capital, as Maharashtra does, leaves the deed under-stamped. The deficit plus penalty must be paid before you can rely on the deed in court.

Not reporting partner changes. If a partner retires and you neither amend the deed nor notify the Registrar under section 63, the outgoing partner can still be held liable, and the firm's records with the bank, GST and the Registrar fall out of sync.

Choosing a firm because it is "cheap" when liability matters. If the business carries real risk, such as construction contracts, manufacturing, borrowing or customer advances, compare the small extra cost of an LLP or private limited company against personal exposure that has no limit.

Official links

• Karnataka — Registration of Firms (IGR)FAQ, Form 1, district registrars
• Telangana — Registrar of FirmsOnline application and fees
• Odisha — Firm registration (IGR)Checklist and fees
• West Bengal — Firms portalOnline application and certificate
• Chandigarh — Registration of firmsApply via serviceonline.gov.in

What to do next

Agree the capital, profit ratio and exit terms with your partners, then have the deed drafted and stamped at your state's rate. Pick a distinctive firm name with our business name generator, file Form 1 with your Registrar of Firms, and apply for PAN, the bank account, Udyam and GST in that order. Once you start billing, our invoice generator creates GST-ready invoices in the firm's name. If the firm grows or takes on risk, revisit the LLP option.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

Is registration of a partnership firm compulsory in India?

Under the Indian Partnership Act, 1932, registration is optional and can be done at any time. But section 69 bars an unregistered firm from suing third parties to enforce a contract, and bars partners from suing the firm or each other. So most firms that deal with customers, suppliers or banks on credit register. Some state amendments add their own conditions, so check your state's rules.

What is the fee for partnership firm registration?

It is set by each state and is usually small. Telangana charges ₹200 + ₹45 user charges, Odisha charges ₹3 (plus ₹2 application fee) plus user charges of ₹250 for up to ten pages, and Chandigarh lists ₹3. The bigger cost is stamp duty on the partnership deed, which also varies by state, plus notary and drafting charges.

How many partners can a partnership firm have?

At least two and at most 50. The cap comes from section 464 of the Companies Act, 2013 read with rule 10 of the Companies (Miscellaneous) Rules, 2014. Some state FAQs still mention the older limits of 10 or 20, but those come from the 1956 Companies Act. A firm with more partners must register as a company or LLP.

Can an unregistered partnership firm get PAN, GST and a bank account?

Yes. The firm applies for PAN using the signed and stamped partnership deed, and can register for GST and open a current account. Banks and the GST department usually ask for the deed, not a registration certificate. Registration with the Registrar of Firms is a separate step that mainly affects your right to sue.

Can a partnership firm get Udyam registration?

Yes. A partnership firm registers on the free Udyam portal using the firm's PAN and the Aadhaar of the authorised partner, with GSTIN where it has one. Udyam does not require the firm to be registered with the Registrar of Firms. It gives access to MSME schemes, priority-sector lending and protection against delayed payments from buyers.

Can a partnership firm be converted into an LLP or company?

Yes. A firm can convert into an LLP by filing a RUN-LLP name application and the conversion form with MCA, with the consent of all partners. It can also become a company under Part I of Chapter XXI of the Companies Act through SPICe+. Conversion keeps the business running while adding limited liability, but it needs the firm's deed and partner consents.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 7 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Registration of Firms — FAQ — Department of Stamps and Registration, Karnataka · accessed 7 October 2026
2. 2.Registrar of Firms — Firm registration — Registration and Stamps Department, Telangana · accessed 7 October 2026
3. 3.Firm Registration under the Indian Partnership Act — Inspector General of Registration, Odisha · accessed 7 October 2026
4. 4.Registration of firms — District Administration, Chandigarh · accessed 7 October 2026
5. 5.Registrar of Firms, Societies and Non-Trading Corporations — Firms portal — Government of West Bengal · accessed 7 October 2026
6. 6.Maharashtra Stamp (Amendment) Ordinance, 2024 — Government of Maharashtra (via PRS Legislative Research) · accessed 7 October 2026
7. 7.Section 69 — Effect of non-registration — Indian Kanoon · accessed 7 October 2026
8. 8.Section 58 — Application for registration — ICAI Navi Mumbai Branch · accessed 7 October 2026
9. 9.Partnership firm stamp duty issues — Bombay Chartered Accountant Journal · accessed 7 October 2026