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Partnership Firm — Deed Clauses and Registration Checklist

A partnership starts with the deed. Registering the firm is optional under the Indian Partnership Act, 1932, but an unregistered firm cannot sue to enforce its contracts (section 69) — so most firms register. Registration is with the Registrar of Firms of your state.

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Clauses the deed should contain

• Firm name, the business it carries on, and its principal place of business
• Duration — a fixed term, or a partnership at will
• Full names and addresses of all partners
• Capital each partner brings in
• Profit and loss sharing ratio
• Interest on capital and on drawings
• Salary or remuneration to working partners — written in, with the amount or how it is worked out
• Powers of partners, bank accounts and who signs
• Admission, retirement, death and expulsion of a partner
• Books of account and audit
• Dissolution and settlement of accounts
• How disputes are resolved — arbitration, for example

Documents for registration

• Form No. 1 (the statement under section 58), signed and verified by every partner
• A certified copy of the stamped deed
• Proof of ownership or occupation of the principal place of business
• PAN and address proof of each partner

If the firm is in Andhra Pradesh

• Filed online with the District Registrar, Registration & Stamps Department (firms.rs.ap.gov.in)
• Stamp duty on the deed: ₹100 where the capital is up to ₹5,000, ₹500 in any other case
• Changes later — name, place of business, partners, dissolution — are reported in Forms II to VII

After registration

• PAN for the firm
• Bank account in the firm's name
• GST registration, if the business needs it

What most often goes wrong

1. Deed not stamped at the rate the state's Stamp Act requires. An understamped deed can be impounded when you most need to rely on it.
2. Form No. 1 not signed by every partner, or no proof for the principal place of business.
3. Partner salaries and interest on capital not written into the deed. The firm can deduct them for income tax only if the deed authorises them and fixes the amount or method — and only within the limits the Act sets.

Official sources

• AP Registration & Stamps — how to register a firm
• AP Registration & Stamps — stamp duty and fees

Reviewed by Ravi Kiran Garlapati, Managing Director, Vedanthh Business & Investment Advisory Pvt. Ltd.. Checked November 2026. Rules change with each Budget and notification — for your own case, ask us.