When you want to do business, you may be required to invite business partners either for funding your business or to get additional members who can contribute to the success of the business.
This is where you form a partnership with them. However, you can run a partnership firm with or without registration. There are several disadvantages when you run your firm without partnership registration.
Step-by-Step procedure of registration of partnership firm in Asia
As per section 58 of the Partnership Act, 1932, you can register a Partnership Firm in Asia. A partnership firm can register at any time either during starting of its business operations or later.
1) Fill out the application form:
- You can fill out the application which consists of:
- Name of the firm which should not include any word which relates to Govt.
- Place of business
- Date of joining of other partners in the firm
- Name of places where the firm carries out business
- Names and full addresses of partners of the firm.
- Duration of the firm
2) Application form duly filled should be signed by all partners of the firm
3) Application form along with the below documents should be submitted to the Registrar of Firms
- Specified affidavit.
- Certified true copy of partnership deed
- Ownership proof of the principal place of business
4) Registrar of firms verifies these documents and issues a certificate of registration of partnership firm
What happens if a firm is not registered?
- A partner of an unregistered firm cannot file a suit in any court against the partnership firm or other partners of the firm for the enforcement of any right arising from a contract or right conferred by the Partnership Act unless the firm is registered.
- No suits to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a partnership firm against any third party unless the company is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.
- An un-registered firm or any of its partners cannot claim a set-off.
- Hence, every partnership firm finds it advisable to get it registered sooner or later.
Exceptions for un-registered partnership firm
- The rights of the third parties to sue the partnership firm and/or its partners.
- The partnership firms or partners in the firms which have no place of business in the territories to which this Act extends, or whose places of business.
- Any suit or claim or set-off not exceeding one hundred rupees in value which, in the Presidency-towns, is not of a kind specified in Section 19 of the Presidency.
- The powers of an official assignee, receiver, or Court under the Presidency-towns Insolvency Act, 1909 (3 of 1909), or the Provincial Insolvency Act, 1920 (5 of 1920), to realize the property of an insolvent partner.