If registration is optional, then why do partnership firms want themselves to get registered? Explain.
Answers
Answer:
However registration is optional, partnership firms willingly go through this legal formality and get themselves registered because it has some merits: 1. Settlement of Claims: Registered firms can file suit against the third parties. So the rights of registered firms are safeguarded by law.
Answer:
Registration of partnership firm means recording of the firm's name and its relevant prescribed particulars, in the Register of firms kept with the Registrar of firms. It provides conclusive proof of the existence of a partnership firm. It is optional for a partnership firm to get registered still most of the partnership firms voluntarily get themselves registered as in case of non-registration, the firm has to face the following consequences (i) A partner of an unregistered firm cannot file a suit against the firm or other partners. (ii) The firm cannot file a suit against third parties. (iii) The firm cannot file a case against the partners. Hence, to avoid these disadvantages, partnership firms register themselves.