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What benefits can you expect to get from the registration of a partnership firm?

The law does not require partnership firms to register. The partners of the firm
can decide whether to register their firm or not. Registered partnerships offer
several advantages, such as providing irrefutable proof that the firm exists, the
names of the partners, their addresses, business activities, and the office of the
firm to anyone dealing with it.

As a general definition, a partnership is an
association of two or more persons who have come together to do business
together and agreed to share profit and loss arising from the business jointly
carried out by them or one of them.

Indian Partnership Act, 1932 governs the
establishment and governance of Partnership Firms in India. Partnership Deed
Registration with the Registrar of Firms is the last step in partnership firm
registration under the Indian Partnership Act, 1932.

Following benefits can be achieved by registration of a partnership firm:

 Suits can be filed against third parties: In case of disputes that arise out
of the conduct of business or out of any other matter concerning the
Partnership Firm, the partners of the registered Partnership Firm can
bring third parties to court for resolution. An unregistered partnership
firm loses all the rights to file a claim against third parties to resolve a
dispute until and unless the registration process is completed. A third
party who is unregistered may still file a claim against a partnership firm,

 A suit can be filed against Co partners also: No one can predict when the
Partners will have an issue, be it a dispute over profit sharing or a matter
related to the firm’s operations. The best way to resolve any dispute is
through the court system.

In the absence of a Partnership Firm
registration, the Partners are unable to enforce Partnership Deed
provisions. To enforce such provisions, a Partnership Firm registration
must be obtained by following the procedures prescribed therefor.

 More reputation in the market: Online Registration of Partnership Firms
can provide a higher level of credibility for a Partnership Firm as
compared to an unregistered firm. The Registered Firm is highly
preferred by authorities for registration over an unregistered firm, even
though both are legal and valid under the Act. A partnership firm can be

registered to enable its partners with rights of set-off to make claims.
When the Partnership Firm is sued by a third party, it may claim, if
necessary, a set-off against that claim.

 Same treatment to partner even after retirement: Former partners are
held responsible for all their firm’s dealings with third parties before
they retired. By giving public notice and making the necessary changes in
the Register of Firms, the retired partner will be discharged from the
liabilities of the partnership from the date of his retirement. The
expelled partner will be treated similarly to how the retiring partner will
be treated under section 33 of the partnership act.


So, you have a chance to convert your unregistered partnership firm into a
registered one, by taking our help & guidance.

Abdullah Jutt
Abdullah Jutt
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