What Are The Benefits Of Registering A Partnership Firm?
According to Indian Partnership Act 1932, registration of partnership is not compulsory as in the case of company. However, registration becomes compulsory as unregistered partnership firm attracts certain limitations. Registration of partnership firm can be done at any time.
Procedure:- An application is filed with the registrar of firms on a prescribed form with application fee and it should be signed by each partner. Following information is included in application form:-
1. Firm’s name.
2. The principal place of firm’s business;
3. Places of business other than the principal place;
4. Date of commencement of business;
5. Partner’s name and addresses.
6. Date of joining the firm by partners.
7. Life span of partnership, if any previously agreed.
Effects of Non-Registration:-
1. An unregistered firm cannot enforce its rights against the third parties.
2. The partners of an unregistered firm cannot sue its fellow partners or the firm for the enforcement of their rights.
3. Partners of the unregistered firm cannot be sued by the firm for exercising its claims.
4. Unregistration of a firm does not affect the rights of the third party to sue the firm for the recovery of dues.
5. Adjustment regarding the amount receivable or payable cannot be made.
Non-Effects of Non-Registration:-
1. An unregistered firm can file a suit for not exceeding Rs.100.
2. Powers of an official assignee or receiver remains unaffected.
3. Despite of unregistration of the firm, partners can still file a suit for the dissolution of the firm.
4. Partners can file a suit for the settlement of accounts.
5. Unregistration of firm does not affect the right to realize the property of the firm.
6. Adjustment regarding the amount receivable or payable can be made upto the amount not exceeding Rs.100.
7. No effect on the rights of the firm and its partners having no place of business in India.
8. No effect on the right to realise the damages by the dissolved firm for breach of a contract.
9. No effect on the partner’s right to refer the dispute to arbitration.
10. An unregistered firm can be sued by the third party.