How is a partnership registered? What are the consequences of non-registration?

Registration of Partnership Firm:

Registration of partnership firms is not compulsory under the Partnership Act 1932. The Act provides that if the partners so desire they may get the firm registered at the time of formation of partnership or afterwards.

The registration of a firm is a simple process. The procedure is as follows:

1. Submission of Statement — In order to get itself registered, a partnership firm must submit a statement in the prescribed form along with the prescribed fee to the Registrar of Firms.

2. Particulars in the Statement — The statement should contain the following particulars: (a) Name of the firm; (b) The principal place of business; (c) Names of other places where the firm carries on business; (d) The date when each partner joined the firm; (e) Names in full and permanent addresses of the partners; (f) Duration of partnership, if any.

3. Signature — The statement must be signed by all the partners.

4. Entry by Registrar — If the Registrar of Firms is satisfied with the statement, he shall make an entry in the register of firms.

5. Certificate of Registration — The firm becomes registered when such an entry is made and a certificate of registration is issued by the Registrar.

6. Communication of Changes — After registration, the firm must communicate any change in the above-mentioned information to the Registrar.

Consequences of Non-Registration:

An unregistered partnership firm suffers from the following limitations:

(a) It cannot enforce its claims against a third party in a court of law.

(b) It cannot sue any of its partners.

(c) Partners of an unregistered firm cannot sue the firm to enforce their claims.

(d) Partners of an unregistered firm cannot file a suit against each other.

(e) It cannot claim adjustment of a claim exceeding ₹100. Suppose an unregistered firm owes ₹1,200 to A and A has to pay ₹1,000 to the firm. The firm cannot enforce adjustment of ₹1,000 in a court of law.