what are the consequences of non registration of partnership firm
Answers
Answer
1] No suit in a civil court by the firm or other co-partners against any third party
If the firm registration is not done, then the firm or any other person on its behalf cannot file a suit against a third party for breach of contract which the firm has entered into. Further, the person filing the suit on behalf of the firm should be in the register of the firm as a partner.
2] No relief to partners for set-off of claim
Without firm registration, any action brought against the firm by a third party having a value of more than Rs. 100 cannot be set-off by the firm or any of its partners. Pursuance of other proceedings to enforce rights arising from the contract cannot be done either.
3] An aggrieved partner cannot bring legal action against other partner or the firm
A partner of the firm or any person on his behalf cannot bring legal action against the firm or against any partner (or alleged to be a partner) if firm registration is not done. However, if the firm is dissolved, then such a person can sue the firm for dissolution it accounts and realization of his share in the firm’s property.
4] A third party can sue the firm
Even if the firm registration is not done a third party can bring legal action against the firm.
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Answer:
Indian partnership Act,1932 stated that registration of partnership firm if not mandatory however there are certain disabilities if a partnership firm is not registration. These disabilities / consequences are given in Section 69 of Indian partnership Act.
1) Firm / Co- partners cannot sue the third party in civil court.
eg: If firm has done credit sale and the debtor is not paying the price then the firm cannot sue that debtor.
2) Partners cannot claim set-off
3) A partner of the firm cannot sue his co -partners or firm
Apart from this a third party can sue the Firm .