PAN Card for Partnership Firm: Online and Offline Process

In countries like India, whose population is only rising daily through the PAN card for the online partnership, it is crucial to keep track of the identities and their authentication. So with the issuing of Pan Card, identification and tax documents for both individuals and businesses can be easily accessible, which is important. Therefore, the Pan card becomes one such important document for taxpayers.

It can be formed either with a written or an oral agreement for partnership firms. The firms are governed under the Indian Partnership Act, 1932. To file a PAN card application for a partnership firm, they must submit a partnership deed.

The partnership firms must apply for a PAN card if they don’t have one already, as it is vital for their order to avail the maximum benefits offered by the government.

In this write-up, read through the process, elements and other factors of having a PAN card for a partnership firm.

What are Partnership Firms?

The Indian Partnership Act, 1932 regulate partnership firms in India. Section 4 of this Act defines partnership as

“Partnership is 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. Individuals who have entered into a partnership with one another are called separate “partners” and collectively termed “a firm”. Also, the name under which their collaboration/business is carried on is called the “firm name”.

Some elements are important for a partnership firm to function smoothly. Hence, as per the Act and definition, five elements constitute a partnership firm. There should be a contract signed between two or more persons, and they should agree to carry on the business. They should have the objective of sharing the profits, and all or any of them should carry out the company on behalf of all.

Elements of a Partnership Firm

A few elements must co-exist in a partnership firm to constitute the collaboration. This partnership firm will fall if any of these elements are not present. The five elements are mentioned in detail below:

Partnership Contract

A partnership firm relies upon a contract. It does not only work with inheritance, status, operation of law, or cost. Like a son can claim the share in the particular partnership firm after the death of his father/mother. But he can not be a part or partner of that firm unless he signs a contract with the other concerned person of the firm agreeing on the same term.

Similarly, in a HUF(Hindu Undivided Family), the members responsible for carrying the business forward will not be called partners. The role arises because of their status and not because of a contract. In a nutshell, a contract is the essential fundamental element of a ‘Partnership Firm’.

The Maximum Number of Partners is 20

As already mentioned, a partnership firm is the product of the contract; hence, at least two people are required to constitute that contract. In the Indian Partnership Act, 1932, the maximum number of partners in the firm is not mentioned. But as per the Companies Act, the maximum number of partners in a banking business should not be more than ten, and in any other, it should not exceed more than 20 partners. Any company that does not follow the maximum number of partners rule will be considered illegal. Hence, the maximum number of partners must be maintained as per the law in any partnership firm.

Also, any person who is competent to enter the contract will sign it. The persons considered for partnership can be natural or artificial. A company with an artificial legal person can enter the contract only if authorised by the Memorandum of Association. Two companies can also come for the partnership firm.

When the partnership firm signs a partnership contract with another partnership individual or firm, the law considers its members. It means that all the partners became partners in their capacity.

Carrying On the Business

The third important element of a partnership firm is carrying on the business. All the partners have agreed to carry on the business. ‘Business’ is a broad term that includes every profession, trade, and occupation. But if the promise is to keep up with the charitable tasks, it will not be considered a partnership.

Likewise, suppose the persons agree to share the income or profit of the property or decide to divide the bulk-purchased goods amongst themselves. In that case, this will not be considered a partnership, and the number of persons will not be called partners as they are not carrying on the business.

Profit Share

This element supports the agreement that the business should be carried on with profit sharing among all the partners. But any business without the objective of profit shares, philanthropist motive or only person who gets all the profits earned will not be considered under a partnership firm.

In a partnership firm, the partners must share the profits earned in any ratio that they would like.

The partners must also agree to share the losses to constitute their partnership. The sharing of losses is open to one or more firm partners.

The ratio in which the profit and loss will be shared among the partners should be mentioned in the partnership deed. As per the Partnership Act, 1932, if the ratio is not mentioned in the deed, both profit and loss will be divided equally among the partners.

Partnership for a Mutual Agency

The fifth important element of a partnership firm says the business should be carried on by the partners or any (one or more partners) who will act for them. Hence, there should be a mutual agency in the partnership.

Every firm partner is both an agent and the principal for other partners, i.e., a partner can be bound by their acts and their other partners’ actions. The importance of mutual agency is that it enables all the partners and the business will be carried out in support of the other members.

Why is a PAN Card Important for a Partnership Firm?

A permanent Account Number (PAN) card is an important document issued by the Unique Identification Authority of India (UIDAI) to all the taxpayers in the country. As per the Income Tax Act, 1961, a PAN card is the identity tax for income-generating individuals and businesses. For that reason, a PAN card for a partnership firm is an important document for the firms operating in India, irrespective of whether the firm was incorporated in India or abroad.

The PAN card for partnership firms will help track and prevent tax evasion. Also, if the partnership firm does not have a PAN card, they can not get the benefits offered by the Indian government for such businesses. In many cases, a PAN card for such firms can help pay taxes at a lower rate applicable.

Hence, it is important to file a PAN card application for partnership firms to avail the benefits offered to the company. But before applying, know what and how you need to proceed with your PAN card for partnership firm application in the sections below.

Formalities to Know Before Applying for a PAN card for Partnership Firm

Before filling the PAN card application for a partnership firm, read through the formalities mentioned in this section to execute the partnership business properly.

• Duly notarised partnership deed by the Indian notary authority.
• One person/partner should be assigned as the managing partner in a partnership deed who will sign all the documents on behalf of the firm.
• A partnership deed should have the date of the partnership formed mentioned in it.
• The firm’s address should be mentioned.
• The partners should sign all the pages of the partnership deed.
• A rubber stamp with ‘Partner’ mentioned should be at the bottom of the act. The managing partner will use the deed to apply for a PAN card for a partnership firm.

Procedures of PAN Card Application for Partnership Firm

A PAN card for a partnership firm can be applied in two ways, i.e., online and offline. The applicants can either choose to apply for the PAN card on the official portal of NSDL or download the form and apply for the PAN card via the offline application mode.

PAN Card for Partnership Firm Online Process

Now the firms can easily apply for a PAN card through the online portal of NSDL. Know the steps to apply for a PAN card for the partnership firm online process.

Step 1: Visit the official portal of NSDL, https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html.

Step 2: The PAN card application for the partnership firm will be available for both Indian residents and those living abroad. Fill the application form 49 A and submit it.

Step 3: In case the data submitted on the portal fails for validation, the message of errors will be displayed on the screen. Rectify the PAN card application errors for the partnership firm and submit it again.

If there were no errors, the confirmation and the mentioned data would be displayed on the screen.

Step 4: After successfully applying, edit or confirm the data mentioned in the confirmation screen.

Step 5: Now, select the payment mode (cheque, demand draft, debit card, credit card, or net banking) and make the payment.

Step 6: After successful payment, the applicant will receive an acknowledgement with a 15-digit acknowledgement number/slip.

Step 7: Take a printout of the slip, sign in the mentioned area, and attach two passport-sized photos.

Step 8: Now, enclose the required documents, acknowledgement slip, and demand draft (if the payment mode was chosen as demand draft) in an envelope.

Step 9: Lastly, post the envelope (label the envelope as Application for PAN – N-Acknowledgement number) to the below address with all the required documents.

Income Tax PAN Services Unit,

NSDL e-Governance Infrastructure Limited,

5th floor, Mantri Sterling, Plot No. 341,

Survey No. 997/8, Model Colony,

Near Deep Bungalow Chowk, Pune – 411016

Through the PAN card for the online partnership process, the application will be successfully submitted and taken forward for the verification process.

 Note- The applicant can digitally submit the PAN card application for the partnership firm via the online paperless application of updating the PAN Card. The digital signatures (eSign) and Digital Signature Certificate (DSC) have been provided for the applicants. This will help them to furnish the PAN card application online. 

PAN Card for Partnership Firm Offline Process

The partnership firms can easily apply for a PAN card through the offline application mode. Know the steps to apply for a PAN card for partnership firm offline processes

Step 1: Get a copy of the application from the UTIITSL agents or download the application form (Form 49 or 49 A) from the official portal of NSDL or UTIITSL.

Step 2: Submit the application form with correct information and attach two passport-sized photos to the partnership firm form.

Step 3: Make payment for the PAN card via the demand draft payment method.

Step 4: Now, attach self-attested copies of required documents along with the application form.

Step 5: On the envelope, mention ‘Application for PAN – N-Acknowledgement Number’ and post it on the address mentioned below:

Income Tax PAN Services Unit,

NSDL e-Governance Infrastructure Limited,

5th floor, Mantri Sterling, Plot No. 341,

Survey No. 997/8, Model Colony,

Near Deep Bungalow Chowk, Pune – 411016

After completing and verifying the application via the PAN card for the offline partnership process, the PAN card will be generated and sent to the applicant’s residential address.

List of Documents required for PAN Card Application for Partnership Firm

• Identity Proof
• Address Proof
• Birth Date Proof
• Declared signed by the Karta of HUF (with the name, father’s name, address of the HUF members) (in case of HUF).
• If it’s a company, a registration certificate issued by its registrar needs to be submitted.
• For a Limited Liability Partnership (LLP) firm, a copy of the registration certificate of the LLP firm must be submitted.
• A copy of the document of the partnership deed needs to be submitted.
• Requisite fee or the demand draft.

Applicable Charges for PAN Card for Partnership Firm

The charge to apply for a new PAN card for partnership firms in India is ₹ 1011.00. The application fees include application fees, dispatch charges and GST, i.e., (Application fee + Dispatch charges of ₹ 857) + 18% GST amount on the new PAN card application.

The reprint/change in PAN card for partnership firm charge is ₹ 1020.00. It consists of application fee, dispatch charges and GST, i.e., (Application fee + Dispatch charges of ₹ 771) + 18% GST amount for the change/reprint of the PAN card.

Points To Remember While Filling PAN Card form for Partnership Firm

• The details should be mentioned accurately, such as the firm’s name should be the same as it is in the registration certificate and partnership deed.
• Since the partnership can’t be an individual entity, start writing the name with M/S.
• The name in the application should be accurate as the same name will be printed on the PAN card for the partnership firm.
• The date of incorporation should be the same as the partnership deed.
• The status of Applicant will be ‘Partnership Firm’.
• Source of income can be from business or profession’. Select the one that fits with the firm.
• Make a code of business according to the one conducted in the firm.
• Mention details of all the documents submitted with the application form.
• The authorised partner will write the declaration section’s name, date, and place.

Partnership Firm Business Code

Tips for Partnership PAN Card

• Only one of the partners from the firm needs to sign the form.
• The managing partner only needs to sign the document.
• The errors and mistakes on the PAN card for partnership firms can be rectified, changed and resubmitted.
• Keep a copy of the registration certificate and partnership deed.
• The PAN card for partnership firms can be tracked online via the acknowledgement number after successfully submitting the form.

Frequently Asked Questions (FAQs)