Commercial Applications
A partnership firm cannot sue a third party in a court of law unless:
- It has a minimum of three partners.
- It is registered with the Registrar of Firms.
- It operates in more than one state.
- It has a partnership deed.
Answer
It is registered with the Registrar of Firms.
Reason — An unregistered partnership firm cannot enforce its claims against a third party in a court of law. To be able to sue a third party, the firm must first get itself registered with the Registrar of Firms by submitting the prescribed statement along with the prescribed fee.
Related Questions
Which of the following is not correct about Limited Liability Partnership (LLP)?
- An LLP is a body corporate having a separate legal entity and perpetual succession.
- An LLP must not maintain annual accounts reflecting the true and fair view of its state of affairs.
- The liability of partners in LLP is limited to their agreed contributions to the LLP.
- As there is no limit on the number, an LLP can raise huge funds for expansion and growth of business.
Arun and Amrita agree to start a business together by pooling their resources and sharing profits. What type of business structure are they forming?
- Sole Proprietorship
- Partnership
- Joint Stock Company
- Cooperative Society
Aman and Rohan started a business as partners. They verbally agreed to share profits equally but did not create a written agreement. Later, they had a dispute about profit sharing. What could have prevented this dispute?
- Registering the firm
- A written partnership deed
- Seeking legal advice before starting
- Limiting the number of partners
Registration of a partnership firm is compulsory under the Partnership Act, 1932.
- True
- False