Manan and Ketan decided to start a partnership business of manufacturing computer
keyboards. Manan is of the view that they should have a written agreement and they
should also register their partnership firm. However Ketan wants to have a verbal
agreement. Even though registration of partnership firm is not compulsory, still partners
prefer to get it registered. Why?
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Explanation:
Partnership form of business entities come under the Indian Partnership Act, 1932. According to this Act, it is not mandatory to register partnership firms. This means it is completely a choice of partners whether to register such form of business entity. However, in case the partners choose not to register the partnership firm, they would not be able to avail the benefits available to registered partnership firms.
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