This article is going to give you a brief understanding of the various requirements and procedures required for establishing a law firm in India. For this, we need to understand the types of law firms which can be established. This includes Sole Proprietorship, Partnership, and Limited Liability Partnership. In sole-proprietorship, there is no formal procedure for registration in India. The person such needs to open a bank account in the name of the proprietorship firm. The same goes for Partnership firm which is directed through the Indian Partnership Act, 1932. Although registration of firms is not necessarily still It is advisable for Entrepreneurs who have plans for operating a business with an annual turnover of more than Rs.20 lakhs to obtain an LLP or Company registration as it gives few rights to its partners.
1. Sole Proprietorship
It is the simplest form of the structure of the business. It is operated by a sole proprietor who does not get the benefit of limited liability in case of recovery of the loan amount. For opening a sole proprietorship legal firm, you are required to open a bank account by that name or obtain licenses required for conducting the business. For this, you will be required to have.
- service tax registration,
- a letter from CA regarding the nature of the business,
- Letterhead with the firm’s name and address,
- Stamp in the name of the proprietor,
- Address and ID proof of the proprietor and office premise address proof If the proprietorship address is different.
This type of firm can be registered either at the time of formation or even subsequently. For registration, you need to file an application with the registrar of the firms of the area in which that firm is located. This will include
- Name of your firm,
- Name of the place where the firm is situated,
- Date of the partners joining the firm,
- Full name and permanent address of partners,
- Duration of the firm.
- Application for Registration in the prescribed Form – I,
- Duly filled Specimen of Affidavit,
- Certified copy of the Partnership deed,
- Proof of ownership of the place of business or the rental/lease agreement.
After satisfying all these conditions, the Certificate of Registration of law Firm will be issued by the Registrar.
3. Limited Liability Partnership (LLP)
Under LLP, all partners are liable only for their part. They need to apply for Designated Partner Identification Number (DPIN) and later Digital Signature Certificate. When the process of application begins, a unique name is required for files for the incorporation of the firm with the Ministry of Corporate Affairs. After this process is completed, a certificate is received. Thereafter, it is a need to get the LLP name approved by the Ministry of Corporate Affairs. Every LLP needs a registered Permanent Account Number (PAN) and Tax Account Number (TAN).
Eligibility for an opening law firm,
- A person shall be at least 21 years old.
- The person shall be having a law degree from any University provided that it has to be recognized by Bar Council of India and
- A person should be registered with any state Bar Council of India.
Factors to be taken into account for establishing law firm in India
- the number of lawyers to want to work with; their roles; liability, financing; management; taxes; record keeping; specialization.
- A maximum of about 2 lakhs is sufficient to start a proper law office at home although this may vary depending upon the partners, functions, location, etc.
- The proprietor might do trademark registration of his/her firm in order to protect the name.
- Law Firms as such do not require registration if the lawyers have been recognized by the Bar Council of India. However, depending upon the profits, there will be certain compliances which are required by the firm to follow.
People can choose between a big law firm having a lot of departments with specialization and thereby allowing clients from different fields and small law firms who doesn’t have a variety of practice areas and thereby limiting the number of clients. A person can start with either way. He can go for investing heavily in terms of infrastructure and lawyers’ cost to get revenue and clients or start with low infrastructure development to get the same results.
For a start-up it is very important to have a “quality team” but most start-up firms do not have the deep pockets to hire the best or most experienced people in the market. But before you rush to hand in your notice, good planning is vital.
Thus registration of business is not at all required by the firms but is at their discourse. So if any business firm plans to open one, they must ask a legal consultant who will help them in determining and understanding the legal and regulatory requirements. Such as GST registration, Udyog Aadhar Registration, FSSAI License, etc.
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8 Replies to “How to open Law Firm in India: Procedures and Requirements”
Nice post about how to open a law firm in India procedures and requirements. I think your post very helpful for more people. Thanks for sharing the information.
Thanks for usefull information.
law firm need CA ?
I am a business man graduated with Commerce without any law degree and interested to start a legal firm. I think I can obtain a GST registration along with a trade license from the Municipal corporation to start a proprietorship business with a team of Lawyers who are registered with Indian Bar Council.
Have you started?
Well explained . Easy to understand.
I am a retired govt. employee I am intersted in opening a law firm, but i am lagging with procedure to follow I may be advised how to start
It’s good to know the procedures before opening a law firm. Before setting up your own law firm, you must be prepared to do your homework. You should start by researching the business setup requirements outlined by the government and regulators.