Commercial Applications
A partnership firm is not registered. The firm lent ₹50,000 to a customer, but the customer failed to repay it. Can the firm take legal action against the customer?
- Yes, as registration is optional
- No, because the firm is not registered
- Yes, if the partners agree unanimously
- No, unless the firm gets registered before filing the case
Partnership
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Answer
No, because the firm is not registered
Reason — An unregistered partnership firm cannot enforce its claims against a third party in a court of law. Since the customer is a third party and the firm is unregistered, it cannot take legal action against the customer to recover the ₹50,000 loan. This is a major disadvantage of non-registration.
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Related Questions
Registration of a partnership firm is compulsory under the Partnership Act, 1932.
- True
- False
Why is it recommended to have a written partnership deed?
- It is mandatory for registration under the Companies Act.
- It serves as a legal record to resolve disputes.
- It reduces the firm's tax liability.
- It ensures limited liability for all partners.
Statement I: Partnership is an association of two or more persons.
Statement II: Partnership is an agreement between two or more persons.
- Only I is correct
- Only II is correct
- Both I and II are correct
- Both I and II are wrong
Which of the following is NOT a demerit of partnership?
- Unlimited liability
- Limited Resources
- Secrecy
- Lack of public confidence