Application of registration under Indian Partnership Act
β Application of Registration under the Indian Partnership Act, 1932
π Legal Basis:
The registration of a partnership firm in India is governed by Section 58 of the Indian Partnership Act, 1932.
Though registration is not mandatory, unregistered firms face certain legal disabilities, especially in enforcing contractual rights (Section 69).
π What is Registration of a Partnership Firm?
It is the legal process by which a partnership firm gets recorded in the Register of Firms maintained by the Registrar of Firms of the respective state.
π§Ύ Contents of the Application (Section 58)
The application (usually in Form A, varies slightly by state) must include the following details:
Name of the Firm
Place of Business
Principal office and other places of business.
Date of Commencement of the partnership
Names and Addresses of Partners
Duration of the partnership (if fixed)
Nature of Business
The application must be signed and verified by all partners or their authorized agents.
π οΈ Procedure for Registration
Step 1: Draft a Partnership Deed
Prepare a written agreement outlining rights, duties, profit-sharing ratios, etc.
Must be printed on stamp paper (as per state laws) and notarized.
Step 2: Filing the Application
File Form A with the Registrar of Firms along with:
Certified copy of the Partnership Deed
Affidavit/Declaration of intention to register
PAN card and address proof of partners
Proof of principal place of business (e.g., electricity bill, rent agreement)
Step 3: Pay Prescribed Fees
Registration fee (varies by state)
Stamp duty on the deed
Step 4: Verification and Certificate
Registrar verifies documents
If all is in order, records the entry in the Register of Firms and issues a Certificate of Registration
π Important Points
Firm name restrictions: Should not be identical to existing firms; certain words (like "Crown", "Empire", etc.) are restricted.
Changes in constitution or particulars must be notified under Section 63.
Registration can be done at any time β at the time of formation or later.
βοΈ Legal Effects of Registration
βοΈ Registered Firm Can:
Sue third parties in court to enforce contractual rights.
Claim set-off in a legal suit.
Enjoy credibility with banks, government agencies, and clients.
β Unregistered Firm Cannot:
(As per Section 69)
File suit against a third party for breach of contract.
Claim set-off or other relief in court.
Enforce contractual rights in court (unless later registered).
π§ββοΈ Case Law: Jagdish Chandra Gupta v. Kajaria Traders (AIR 1964 SC 1882)
Held: An unregistered firm cannot enforce even arbitration agreements unless it is registered before initiating legal action. This case highlights the disabilities of unregistered firms.
π Conclusion
Registration is optional but highly recommended.
It confers legal legitimacy and the ability to enforce rights in courts.
Simple process but requires careful documentation and compliance with Section 58 of the Act.
RELATED Blog
0 comments