CORPORATE LAW

PARTNERSHIP FORMATION PROCESS

 Assignment:1

Submitted by:
Process of forming a Partnership
Muhammad Mohiuddin
Baig
Below is a flow diagram which shows the various
stages and the legal BBA 2k5 (B) paperwork required in
order to form a partnership between two or more
Date: 14-May-09
partners. The forms that are required to be filled are
attached in the end with reference in order to have
a clear understanding of the process.

The Process and Requirements

In Step 1 the form I is obtained from the office of registrar of firms which is on the
second floor of F8 kacheyri (above the office of SSP). The attested copy of this form
is attached at the end. The components of this form are as follows:

• Name of the company

• Name and details of the Partners
• Nature of the business and its location
• Initials of partners and witnesses

The second step involves preparing a partnership deed on a stamp paper of Rs.
500. For this purpose a sample partnership deed has been obtained. In the next
step a challan form has been obtained which needs to be filled and deposited to a
branch of National bank along with Rs. 500. A challan form has been attached in the
end as well. The next few steps require additional paperwork which includes the
copy of lease agreement or the allotment letter of the physical office. The office
needs to be established in a commercial area.

The next step requires attestation of all documents through notary public. For this
purpose the Form I have been attested although it is empty. The last step requires
the physical presence of partners in the registrar’s office and the process takes
three days.
Change in Constitution of the Firm or the Dissolution of
the Firm

In case of change on the constitution of the firm meaning that some partner has left
or a new partner is added Form No. V is obtained from the registrar’s office.
Essentially the form is same for the change in constitution or dissolution of the firm.
This form has two parts in case of change in constitution the upper section is filled
and in case of dissolution the lower section is filled.

The dissolution of a firm involves the following steps

The above steps are exactly the same as in the formation of the partnership
however the amounts and the purpose are different. The process for the
reconstitution is the same except the outgoing partners need to give their consent
on a Rs. 5 stamp paper.

The dissolution and reconstitution form has the following components:

• Name of the firm

• Names of the incoming or outgoing partners
• Initials of these partners

Form V has also been attached along with a sample form of reconstitution.