Why the partnership deed matters more than anything else
A partnership is created by agreement. The deed is the only document that records who contributed what, how profits are shared, who can sign, and what happens when a partner leaves. In our work with firms in Gurugram, most partner disputes and income-tax disallowances trace back to a deed that was copied from a sample or never updated. We draft each deed afresh in formal legal terms, using clear role descriptions such as “Party of the First Part” and “Party of the Second Part”, and explain each clause to all partners before they sign.
| Clause | What it should state |
|---|---|
| Name, business and principal place of business | The firm’s name, nature of business and address, plus branches if any |
| Commencement and duration | Date of start, and whether the firm is at will or for a fixed term |
| Capital contribution | Amount brought in by each partner and how further capital is introduced |
| Profit and loss sharing ratio | The ratio for each partner, including how losses are borne |
| Working partners and remuneration | Names of working partners and the method of computing remuneration |
| Interest on capital and drawings | The rate, not exceeding the tax limit, and treatment of drawings |
| Banking and authority | Who operates bank accounts and signs contracts |
| Admission, retirement, death and dissolution | Procedure, valuation of goodwill and settlement of accounts |
| Arbitration | Method of resolving disputes among partners |
Stamp duty and execution in Haryana
The deed is stamped as per the Indian Stamp Act as applicable in Haryana, normally through e-stamp paper bought before signing. All partners sign the deed in the presence of witnesses, and notarisation is commonly done for evidentiary purposes. Where immovable property is brought into the firm as capital, separate stamp duty and registration consequences can arise, which we check before drafting.
Registration with the Registrar of Firms, Haryana
Partnership firms in Haryana are governed by the Indian Partnership Act, 1932, and registration is handled by the Registrar of Firms. The Haryana Registration and Regulation of Societies Act, 2012 deals with societies, not with partnership firms, so the two should not be confused.
- Name selection. We check that the proposed name is not identical or deceptively similar to existing firms or trademarks and does not use restricted words.
- Deed drafting and stamping. The deed is finalised, e-stamped and signed by all partners.
- Online application. The application with the statement required under section 58 of the Act, partners’ details, deed and address proof of the principal place of business is filed through the Haryana Industries and Commerce Department’s online firm registration service, with the prescribed government fee.
- Verification. The concerned district registration office examines the application and may ask for clarifications or original documents.
- Registration. The firm is entered in the Register of Firms and the acknowledgement or certificate is issued.
| Document | Details |
|---|---|
| Partnership deed | Stamped and signed by all partners |
| Partners’ KYC | PAN, Aadhaar and photographs of each partner |
| Principal place of business | Ownership proof or rent agreement with a recent utility bill, and owner’s consent where needed |
| Application and declarations | In the format required on the portal, signed by all partners |
Benefits of registration under section 69
Section 69 of the Indian Partnership Act, 1932 places real limits on unregistered firms:
| Situation | Unregistered firm | Registered firm |
|---|---|---|
| Firm suing a customer or third party to enforce a contract | Not allowed | Allowed |
| Partner suing the firm or other partners on rights under the deed | Not allowed, except for dissolution and accounts | Allowed |
| Claiming a set-off above a small value in a suit | Not allowed | Allowed |
| Credibility with banks, large buyers and tenders | Lower | Higher |
Registration also makes it easier to convert the firm into an LLP later.
PAN, GST and other registrations
After the deed is signed, we apply for the firm’s PAN and TAN, help open the current account and, where needed, file for GST registration, shop and establishment registration and Udyam. Each of these is in the firm’s name, with the authorised partner as signatory.
How a partnership firm is taxed
| Item | Treatment |
|---|---|
| Tax rate on firm’s income | 30%, plus surcharge above Rs 1 crore income and cess; no basic exemption |
| Interest on partners’ capital | Deductible up to 12% simple interest a year, if authorised by the deed |
| Remuneration to working partners | On the first Rs 6 lakh of book profit, up to Rs 3 lakh or 90% of book profit, whichever is higher; on the balance, up to 60% |
| Remuneration or interest above these limits | Disallowed in the firm’s hands |
| Share of profit received by partners | Exempt in partners’ hands |
| Remuneration and interest received by partners | Taxable in partners’ hands |
| TDS on payments to partners | 10% once the yearly total to a partner exceeds Rs 20,000 |
| Income-tax return | ITR-5, with tax audit where turnover crosses the audit limits |
These rules continued under the Income-tax Act, 2025, which applies from tax year 2026-27, with renumbered sections. Our income tax filing team prepares the firm’s return and computes remuneration within the limits each year.
Admission, retirement and reconstitution
When the partner group changes, the paperwork must follow. We draft:
- Admission deed bringing in a NEW PARTNER, with capital and profit share.
- Retirement deed for a RETIRING PARTNER, covering settlement of the capital account and goodwill, and release of claims.
- Reconstituted partnership deed among the CONTINUING PARTNERS.
- Notice to the Registrar of Firms of the change, and updates with the bank, GST portal and income-tax records.
Why choose KSV for your firm in Gurugram
KSV is a tax and accounting consultancy run by Kailash Vashisht (B.Com, MBA Finance). It is not a firm of chartered accountants or company secretaries; where a document needs professional certification, it is certified by an associated practising professional. We handle the deed, registration, book-keeping and tax filings with one team. Call or WhatsApp +91 88606 30505 or visit our Gurgaon office through the contact page.
Frequently asked questions
Is registration of a partnership firm compulsory in Haryana?
No. The Indian Partnership Act, 1932 does not make registration compulsory, and there is no penalty for not registering. However, an unregistered firm and its partners face serious limits on going to court under section 69 of the Act, so registration is strongly advisable.
Which office registers partnership firms in Gurugram?
Firms in Haryana are registered by the Registrar of Firms under the Indian Partnership Act, 1932. The application is made online through the Haryana Industries and Commerce Department's firm registration service and is verified by the concerned district registration office before the firm is entered in the Register of Firms.
How much stamp duty is payable on a partnership deed in Haryana?
Stamp duty on a partnership deed is payable as per the Indian Stamp Act as applicable in Haryana, and is usually paid through e-stamping before the deed is signed. We confirm the current amount at the time of drafting, as rates are revised by the state from time to time.
Can a partnership firm get PAN and GST without registration with the Registrar?
Yes. A firm can obtain PAN, open a current account and take GST registration on the basis of a signed and stamped partnership deed. Some banks and departments, however, ask for the registration certificate, which is another reason to register.
How many partners can a firm have?
A partnership needs at least two partners. Under the Companies Act, 2013 and its rules, a partnership business cannot have more than 50 partners; beyond that it must be registered as a company or an LLP.
How is a partnership firm taxed?
A firm is taxed at a flat 30% on its total income, with surcharge if income exceeds Rs 1 crore, plus health and education cess. There is no basic exemption limit. The partners' share of profit is exempt in their hands, while remuneration and interest received from the firm are taxable in the partners' hands as business income.
What are the limits on salary and interest to partners?
Interest on partners' capital is allowed up to 12% simple interest a year. Remuneration to working partners is allowed on the first Rs 6 lakh of book profit up to Rs 3 lakh or 90% of book profit, whichever is higher, and on the balance up to 60%. Both must be authorised by the deed. These limits have been carried into the Income-tax Act, 2025 from tax year 2026-27.
Is TDS deducted on partners' remuneration?
Yes. From 1 April 2025, a firm must deduct tax at 10% on salary, remuneration, commission, bonus or interest paid or credited to a partner once the total for the year exceeds Rs 20,000. Share of profit is not covered.
Partner retire ho raha hai, kya naya deed banana padega?
Yes. When a partner retires or a new partner joins, a retirement deed or admission deed is executed, followed by a reconstituted partnership deed among the continuing partners. The change is reported to the Registrar of Firms and updated with the bank, GST and income-tax records.
Can a registered firm later convert into an LLP?
Yes. A firm can convert into an LLP under the LLP Act, 2008 if all its partners become partners of the LLP. See our LLP registration page for the process.