Is Registration of PARTNERSHIP FIRM Compulsory? The Registration of Partnership Firm is not compulsory by law.

The partnership Act 1932 does not compel the partners for registration of their firm. But the registered firm has certain benefits over the unregistered firm. But it does not provide any separate legal entity to the firm. Registration is very helpful in

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The Registration means to record the name of the firm with registrar of Partnership Firms according to Partnership Act 1932. The registration is the evidence of existence of the firm.

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Question No. 7: How can a Partnership Firm be registered? Explain the advantages of registration and effects of non-registration. OR How a firm is registered? Discuss the special attraction of registrations. Write also the effects of non-registration. OR What is the process of registration? Discuss the advantages and importance of registration. Write also the effects of non-registration. Answer: REGITRATION OF PARTNERSHIP FIRM: Definition:

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the progress of business. A registered firm is preferred and government provides many facilities to the registered firms. PROCEDURE FOR REGISTRATION: Following steps are included in the registration of Partnership Firm: Application for Registration: Application for registration of the firm is submitted to the registrar of Partnership Firm on the prescribed form. Following documents must be submitted to registrar with application form: Basic information

Registration fee & filling of challan form

Submission of application in printed form to the Registrar

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Partnership Deed

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Changes in Application of Registration

2. Partnership deed: Partnership deed means a partnership agreement made

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The Name of the firm The Principal Office of the firm The Name of sub offices, if any The names of the partners The Permanent address of partners Date of joining of each partner The Nature of business The duration or Purpose of the firm, if any Signature of the partners

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Details of Registration: 1. Basic information: Following information should be provided to registrar:

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Registration Certificate

between the partners of the firm, and the copy of this agreement must be submitted to the registrar of the Firms. 3. Registration Fee by Filling Challan Form: Required registration fees are deposited with the help of challan form. After Filling and depositing the fees one copy of challan form must be submitted to the registrar of the Firms.

Note: A person who provides false information to the registrar shall be punished with imprisonment which may extend to 3 months or with fine or with both [Sec. 70] 6. Changes in Application of Registration: If a firm wants to make changes in the registration form, the registrar will make the changes in the record according to the new statement, if he satisfied and if all the partners are agree with the changes made in the deed.

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5. Certificate of Registration: After receiving the application form, registrar will examine the information and documents which provided along with the application. If he is satisfied then he will record the name of the firms in the Register of Firms, and he issued a certificate of registration to the firm.

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4. Submission of Application in Printed Form: An application form will be submitted to registrar for the registration which possesses the above all information and challan forms one copy.

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4. Increase in Business Reputation: Registered firm enjoys the good business reputation as

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3. Greater Loan Facilities: A registered firm can easily obtain loan from financial institutions because financial institutes easily trust on registered firm.

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2. Greater Public Confidence: The people have more confidence on the registered firm because they think that it is working under the supervision of the Government and there are no chances of frauds.

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A) Advantages for the Firm: 1. Increase in Goodwill: The goodwill of business of registered firm is more than unregistered firms. So due to this factor the registered firms earn the higher profit.

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ADVANTAGES OR IMPORTANCE OF REGISTRATION: A registered firm enjoys the following benefits: Advantages for the Firm Advantages for the Partners Advantages for the Creditors

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compared to unregistered firms. Any other business cannot copy of its product, which makes it more profitable. 5. Use Business Trademark: Registered firms use their trade mark to advertise their product. It makes their business profitable; any other firm cannot use trade mark of the registered firm. 6. Greater Government Protections: Registered firms work according to the rules and regulation of the government so the firm works without any fear.

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B) Advantages for the Partners: 9. Settlement of Disputes: If any dispute arises among the partners registration is basic legal document for settlements. An unregistered firm may come to an end if any dispute arises.

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8. Right of Suit against Third Pay: Registered firm has a right to file suit against third party for recovery of his duos. But this facility is not available to an unregistered firm.

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7. Greater Tax Facility: Tax is charged on profit of partners of firm individually. But in unregistered firm the tax is charged on the whole of its income.

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EFFECTS OF NON-REGISTRATION:

The effects if non registrations are follows:

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15. Full Recovery: The creditors of the firm can hold all the partners liable for the payments of their debts due by the firm.

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C) Advantages for the Creditors: 14. Protection to Creditors: The partners of a registered firm cannot deny the creditors from getting membership of the firm.

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13. Protection to Retired Partner: When a partner is retired in registered firm then he sends a notice of retirement to registrar and after the notice he is free from liabilities.

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12. Clear Terms of Agreement: The term of agreement is clear to each partner in writing due to registration of a firm.

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10. Right of Suit for Incoming Partners: The rights of new partner are safe by law. He can file a suit against his co-partners for his dues. 11. Protection to New Partner: The rights of new partner are also protected in registered firm. If a new partner fails to register himself then he may suffer a loss.

2. Suit by Partners: Partners of unregistered firm cant file a suit against his co-partner for the recovery of their dues.

CONCLUSION: It is concluded that the partnership firm should be registered because a registered firm can get many benefits. Registered firm has long life due to fewer chances of disputes and misunderstanding among the partners. Registered firm also

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5. No Claim for Adjustments: A firm cannot claim adjustment of the amount exceeding Rs. 100 payable and receivable by the firm. For Example a firm has to pay Rs. 500 to Mr. Jawad who owes Rs. 900 to firm, the firm cannot claim for adjustment and enforce in the court.

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4. Suit against Partners: The third party has full right to file a suit for the recovery of their dues against the unregistered partners.

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3. Suit against Firm: The third party has full right to file a suit for the recovery of their dues against the unregistered firm.

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1. Suit by Firm: The unregistered firm cant file a suit against the third party for the recovery of dues which is the main drawback of the unregistered firm.

earns more profit due to low income tax and any other firm cannot make copy of its product.

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