{"id":322,"date":"2020-12-15T11:04:44","date_gmt":"2020-12-15T11:04:44","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=322"},"modified":"2020-12-17T05:26:27","modified_gmt":"2020-12-17T05:26:27","slug":"is-it-necessary-to-register-a-partnership-firm","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/is-it-necessary-to-register-a-partnership-firm\/","title":{"rendered":"Is it Necessary to Register a Partnership Firm?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Section 58 of the Indian Partnership Act, 1932 states that the registration of a firm can be done at any time( not necessarily at the time of formation but subsequently also) by filing an application with the registrar of the firm at the place of business or the firm situated or proposed to be situated. But the important question that arises is whether it is necessary to register a partnership firm in India or not? Part VII of the Partnership Act does not necessitate the compulsion to register a partnership firm. However, the registration of a partnership firm has many advantages. <\/p>\n\n\n\n<p>This article\nwill help you to understand the benefits of a partnership firm and the\nadvantages that it can have if it is registered under the Partnership Act. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a623eb3bfc\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a623eb3bfc\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-necessary-to-register-a-partnership-firm\/#What_is_Partnership\" title=\"What is Partnership?\">What is Partnership?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-necessary-to-register-a-partnership-firm\/#Why_Partnership_Firm_Registration_is_Important\" title=\"Why Partnership Firm Registration is Important?\">Why Partnership Firm Registration is Important?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-necessary-to-register-a-partnership-firm\/#Advantages_of_Partnership_Firm_Registration\" title=\"Advantages of Partnership Firm Registration\">Advantages of Partnership Firm Registration<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-necessary-to-register-a-partnership-firm\/#Right_to_Sue_the_Firm_or_a_Partner\" title=\"Right to Sue the Firm or a Partner\">Right to Sue the Firm or a Partner<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-necessary-to-register-a-partnership-firm\/#Right_to_Sue_Third_Party\" title=\"Right to Sue Third Party\">Right to Sue Third Party<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-necessary-to-register-a-partnership-firm\/#Claim_a_Set-off\" title=\"Claim a Set-off\">Claim a Set-off<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-necessary-to-register-a-partnership-firm\/#Effects_of_Non-Registration\" title=\"Effects of Non-Registration\">Effects of Non-Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-necessary-to-register-a-partnership-firm\/#What_does_Non-Registration_not_effect\" title=\"What does Non-Registration not effect?\">What does Non-Registration not effect?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-necessary-to-register-a-partnership-firm\/#Procedure_to_Register_a_Partnership_Firm\" title=\"Procedure to Register a Partnership Firm\">Procedure to Register a Partnership Firm<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-necessary-to-register-a-partnership-firm\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Partnership\"><\/span>What is Partnership?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The partnership is defined as a relationship between two or more persons who have agreed to share the profits and losses of a business managed by all of them or any one of them acting for all. The owners under a partnership firm are separately known as the \u201cpartners\u201d and collectively a firm.&nbsp; The partnership firm is governed and controlled by the rules contained in the Indian Partnership Act, 1932. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Partnership_Firm_Registration_is_Important\"><\/span>Why Partnership Firm Registration is Important?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Under Part VII of the <strong>Indian Partnership Act, 1932<sup><strong><em><a class=\"text-primary\" href=\"https:\/\/www.mca.gov.in\/Ministry\/actsbills\/pdf\/Partnership_Act_1932.pdf\">[1]<\/a><\/em><\/strong><\/sup><\/strong> the registration of a partnership firm is not compulsory. However, it can be done in order to avail the benefits of Registration. It is on the decision of the partners to register the firm and there are no penalties for non \u2013 registration. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages_of_Partnership_Firm_Registration\"><\/span>Advantages of Partnership Firm Registration<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2020\/12\/infographics-1-1.png\" alt=\"Partnership Firm advantages\" class=\"wp-image-326\" width=\"362\" height=\"458\" srcset=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2020\/12\/infographics-1-1.png 486w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2020\/12\/infographics-1-1-237x300.png 237w\" sizes=\"(max-width: 362px) 100vw, 362px\" \/><\/figure><\/div>\n\n\n\n<p>A partnership firm is one of the most preferred forms of starting a business in India because of its simplicity. There are many advantages that the partners can enjoy upon the <strong><a href=\"https:\/\/swaritadvisors.com\/partnership-firm-registration\" class=\"text-primary\">registration of the partnership firm<\/a><\/strong>. Some of the advantages are as follows: &#8211; <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Right_to_Sue_the_Firm_or_a_Partner\"><\/span>Right to Sue the Firm or a Partner<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A partner in a registered partnership firm has a right to file a suit against the said firm or any partner within the firm. Such a right is also specified under the Partnership Act which states that a partner whose name is entered into the Registers of the firm as a partner in the firm; has a right to file a suit. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Right_to_Sue_Third_Party\"><\/span>Right to Sue Third Party<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A registered partnership\nfirm has a right to file a suit against a third party when the registration of\nthe firm is done and the persons suing is entered into the registers of the\nfirm as a partner in the firm. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Claim_a_Set-off\"><\/span>Claim a Set-off<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The partners or the firm can claim a set-off under a registered partnership firm. A set-off means a mutual adjustment of debts owed in a dispute with a third party. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Effects_of_Non-Registration\"><\/span>Effects of Non-Registration<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 69 of the Partnership Act deals with the effects of non-registration which refuses or denies certain rights to an unregistered firm such as: &#8211;<\/p>\n\n\n\n<ul><li>A partner of an unregistered firm does not have right to file a suit against a firm or other partners in any court for the enforcement of any right arising from a contract or a right is granted by the Partnership Act unless the firm is registered under the act and the person suing is or has been shown in the Register of firms as a partner in the firm. <\/li><li>A suit to enforce a right arising from a contract shall not begin in any court by or on behalf of a firm against any third party unless the registration of the firm is done and the person suing is or has been shown in the Register of partnership firms as a partner in the firm.<\/li><li>A partnership firm which is not registered and any of its partners cannot claim a set-off. A set-off means a mutual adjustment of debts owed in a dispute with a third party. <\/li><\/ul>\n\n\n\n<p>Therefore, every partnership firm finds it advantageous to get itself registered under the Partnership Act sooner or later. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_does_Non-Registration_not_effect\"><\/span>What does Non-Registration not effect?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Non \u2013\nregistration does not affect the following things: &#8211; <\/p>\n\n\n\n<ul><li>Any set-off, claim or suit which does not exceed one hundred rupees in value. <\/li><li>The right of the third party to sue the partners or the firm<\/li><li>The firm or partners in the firm whose place of business in the said territory is situated in the areas to which the act does not apply or which have no place of business in the territories to which this Act extends. <\/li><li>The enforcement of any right to sue for accounts of a dissolved firm or to sue for the dissolution of a firm or any power or right to realise the property of a dissolved firm. <\/li><li>The powers of a receiver, official assignee or court under the Presidency- Provincial Insolvency Act, 1920 or Towns Insolvency Act, 1909, to realise the property of an insolvent partner. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_to_Register_a_Partnership_Firm\"><\/span>Procedure to Register a Partnership Firm<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The registration of a partnership firm can be done by providing the following details and information to the Registrar of the firms: &#8211;<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2020\/12\/infohraphis-without-heading.png\" alt=\"Partnership Firm Registration Procedure \" class=\"wp-image-334\" width=\"559\" height=\"559\" srcset=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2020\/12\/infohraphis-without-heading.png 1000w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2020\/12\/infohraphis-without-heading-150x150.png 150w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2020\/12\/infohraphis-without-heading-300x300.png 300w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2020\/12\/infohraphis-without-heading-768x768.png 768w\" sizes=\"(max-width: 559px) 100vw, 559px\" \/><\/figure><\/div>\n\n\n\n<ul><li>The Firm\u2019s Name<\/li><li>The Place of Business where the Firm is Situated<\/li><li>The Partners Names &amp; Addresses <\/li><li>The name of the Places where the firm has its\nBranches<\/li><li>Date of Joining by the Partners of the Firm <\/li><li>Date of Commencement of Business of the Firm <\/li><li>The Duration of Partnership Firm<\/li><\/ul>\n\n\n\n<p>The statement of\nall the information stated above must be submitted by the partners, signed by\nthem and along with the prescribed fees. The Registrar shall, upon the\nsatisfaction of the statement shall make an entry of it in the register and\nshall file the statement. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Indian Partnership Act, 1932 ensures the registration of a partnership firm without making it compulsory. It is not obligatory to register a partnership firm but a firm can enjoy many advantages that the Partnership Act provides upon its registration. Therefore, registration of a partnership firm protects the firm and its partners from the effects that it would have if it is not registered.<\/p>\n\n\n\n<p><b>Also, Read:<\/b> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/how-is-nidhi-company-different-from-nbfc\/\">How Is Nidhi Company Different From NBFC: A Complete Guide<\/a><\/mark><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Section 58 of the Indian Partnership Act, 1932 states that the registration of a firm can be done at any time( not necessarily at the time of formation but subsequently also) by filing an application with the registrar of the firm at the place of business or the firm situated or proposed to be situated. [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":323,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[54],"tags":[97],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/322"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=322"}],"version-history":[{"count":12,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/322\/revisions"}],"predecessor-version":[{"id":385,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/322\/revisions\/385"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/323"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=322"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=322"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=322"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}