If registration is optional, Why are partnership firms willing to go through this legal formality and get themselves registered? Explain.

By Harshvardhan, Subject matter Expert at Edumarz.

Solution: Registration of a partnership firm means the entering of the firm’s name along with the 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. In case a firm does not get registered, it is deprived of many benefits. The consequences

of non-registration of a firm are as follows:

1. A partner of an unregistered firm cannot file a suit against the firm or other partners
2. The firm cannot file a suit against third parties, and
3. The firm cannot file a case against the partners.

In view of these consequences, it is, therefore, advisable to get the firm registered. According to the India Partnership Act 1932, the partners may get the firm registered with the Registrar of firms of the state in which the firm is situated. The registration can be at the time of formation of a partnership or at any time during its existence.