CA Discussion ForumWhat is effect of non-registration of partnership? Section 69 of partnership act? How much should we write in exam? Examples also
monika sagar asked 3 years ago
1 Answers
CA Preeti Aggarwal Staff answered 3 years ago

Indian Partnership Act neither makes registration of firms compulsory nor imposes any penalty for non-registration. However, under Section 69, non-registration of partnership gives rise to a number of disabilities which makes registration of firms desirable.
 
1)    No suit by partner against the firm or other partners

  • A partner of an unregistered firm cannot file a suit against the firm or other partners of the firm to enforce any right arising from the contract.

     This prohibition exists on institution of civil suit and not on criminal suit
 
2) No suit by firm against third parties

  • An unregistered firm cannot file a suit against the third party to enforce any right arising from contract.
  • This disability can be removed by getting the firm registered before filing the suit.
  • Subsequent registration could not cure the defect that existed at the time of filing the suit.

 
3) No right to claim set off in excess of ₹100

  • An unregistered firm or any partner cannot claim set off (if the value exceeds ₹100) in proceeding against the firm by a third party to enforce a right arising from a contract.

 
You can write one example for each point depending on the weightage of the question