Meaning of ‘Registration’

When by some partnership firm, an application is
filed with the registrar of firms for the purpose of registration, and on the fulfilment of all the legal formalities, when the registrar enters the name of that firm in a register, known as the register of the firms, this is known as the ‘registration’. According to the Indian Partnership Act, 1932, registration of a firm is not compulsory. Since a partnership firmnhas to face certain disabilities and inconveniences, as such it is desirable from the commercial point of view for any firmnto get the firm registered with the Registrar of firms of thenstate in which the primary business of the firm is carried out.

Procedure for registration

The registration of a firm may be effected at any time by sending by post or delivering to the registrar of the area (in person) in which the firm is situated or proposed to be situ- ated, a statement in the prescribed form and accompanied by the prescribed fees. The statement should include the following particulars:

(i) Name of the firm;

(ii) The place or principalnplace of business of the firm;

(iii) The names of any othernplaces where the firm carries on the business;

(iv) The datenwhen each partner joined the firm;

(v) The names in full andnpermanent addresses of the partners; and

(vi) The duration of the firm.

The statement shall be signed by all the partners, or by their agents specially authorised in this behalf. Each person signing it shall also verify in the prescribed manner. If the registrar is satisfied with the application, he registers the firm and enters its name in the register of the firms. He will then issue a certificate of registration.

The firm might be got registered any time but the
registration must be got done before filing of any sort of the suit in the court, otherwise the court of law shall refuse to grant any permission for the aplication to be considered.

Is the registration essential?

Sometimes the question arises whether the registration of a firm is compulsory or not. As per the provisions of the Act, it is not compulsory for the firm to be got registered, but is only discretionary. The existence of any firm doesn’t commence from its registration but by the agreement or contract made between two or more persons. Hence, the registration of the firm is not essential. But due to not getting it registered, the firm is sometimes required to face such grave situations and serious problems that ultimately the firm has to decide to get it registered.

Consequences of non-registration

The non-registration of the firm may cause following disabilities or the inconveniences:

(1) Suits between partners and firm. A partner of an unregistered firm cannot sue the firm or any of his present or past co-partners for enforcement of any right arising from a contract or conferred by the Partnership Act.

(2) Suits between firm and third parties. An unregistered firm cannot sue a third person for enforcement of any right arising from the contract. A suit by an unregistered firm will be dismissed and cannot be rectified by subsequent registration. A fresh suit may be filed after the regidtration.

(3) Third parties can sue the firm if the firm is unregistered, any third person can bring suit against the firm.

Rights remaining unaffected due to non-registration

The non-registration shall not affect the following
rights:

1.Any of the partners might file an application with the court for dissolution of the firm;

2.A party, after the dissolution, might demand his account from the firm;

3.The firm could file a suit against a third party upto a value of Rs 100;

4.The official receiver shall be authorised to realise from the property of the insolvent partner;

5.The rights of the firms or their partners, having their head offices overseas, shall not be affected in any way.