Under the Indian Partnership Act, 1932, the registration of a firm is optional, not mandatory. However, Section 69 imposes such severe legal disabilities on unregistered firms that registration becomes a practical necessity.
Consequences of Non-Registration:
No suit against third parties: An unregistered firm cannot file a lawsuit against a third party to enforce a right arising from a contract.
No suit between partners: A partner of an unregistered firm cannot sue the firm or other partners for the enforcement of rights under the partnership contract.
No Right of Set-off: The firm cannot claim a set-off (a counter-claim to reduce a debt) exceeding ₹100 in a legal proceeding.
Exception: Non-registration does not prevent third parties from suing the firm, nor does it affect the right of a partner to sue for the dissolution of the firm or for accounts of a dissolved firm.
No comments:
Post a Comment