A Partnership firm is a business entity created by persons who have agreed to share profits or loss of the business.
Partnerships are a very good choice of business entity for small enterprises wherein two or more persons decides to
contribute to a business and share the profits or losses
IS IT NECESSARY TO REGISTER A PARTNERSHIP FIRM
Indian Partnership Act, 1932 governs the partnerships. Registration of partnership firm is optional and it depends on
the discretion of the partners.
However it is always advisable to register the firm since a registered firms enjoy special rights which aren’t available
to the unregistered firms.
CONSEQUENCES OF NON REGISTRATION
A partner of an unregistered firm cannot file a suit in any court against the firm or other partners for the enforcement
of any right arising from a contract or right conferred by the Partnership Act.
No suit to enforce a right arising from an agreement can be instituted in any Court by or on behalf of a firm against
any third party unless the firm is registered.
An unregistered firm or any of its partners cannot claim set-off or other proceedings in a dispute with a third party.
Therefore, an unregistered partnership firms should apply for registration as soon as possible.
