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    Assignmnets of LOC 2

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    Rounak Sinha
    The document discusses the registration of partnerships under Indian law. It notes that registration requires submitting an application with details like the firm name, business locations, and partners. If a partnership is not registered, the consequences are: 1) partners cannot sue each other or the firm to enforce partnership rights, 2) the firm cannot sue third parties to enforce contractual rights, and 3) claims of set-off or arbitration cannot be used to enforce contract rights for unregistered firms.

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    Assignmnets of LOC 2

    Uploaded by

    Rounak Sinha
    41 views2 pages
    The document discusses the registration of partnerships under Indian law. It notes that registration requires submitting an application with details like the firm name, business locations, and partners. If a partnership is not registered, the consequences are: 1) partners cannot sue each other or the firm to enforce partnership rights, 2) the firm cannot sue third parties to enforce contractual rights, and 3) claims of set-off or arbitration cannot be used to enforce contract rights for unregistered firms.

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    The document discusses the registration of partnerships under Indian law. It notes that registration requires submitting an application with details like the firm name, business locations, and partners. If a partnership is not registered, the consequences are: 1) partners cannot sue each other or the firm to enforce partnership rights, 2) the firm cannot sue third parties to enforce contractual rights, and 3) claims of set-off or arbitration cannot be used to enforce contract rights for unregistered firms.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    41 views2 pages

    Assignmnets of LOC 2

    Uploaded by

    Rounak Sinha
    The document discusses the registration of partnerships under Indian law. It notes that registration requires submitting an application with details like the firm name, business locations, and partners. If a partnership is not registered, the consequences are: 1) partners cannot sue each other or the firm to enforce partnership rights, 2) the firm cannot sue third parties to enforce contractual rights, and 3) claims of set-off or arbitration cannot be used to enforce contract rights for unregistered firms.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 2

    Non-Registration of Partnership and it’s Consequence

    Partnership

    Sec 4 of the Indian Partnership Act, 1932 defines partnership as the relation between
    persons who have agreed to share the profits of business carried on by all or any of them
    acting for all.

    Partnership is contractual relationship between two or more competent persons for the
    purpose of carrying on business and sharing of profits on the basis of mutual agency.

    Procedure of Registration

    Section 56-71 of the Act deal with the registration of firms. The registration of a firm may be
    filed at any time by submitting an application comprising of a statement in a prescribed form
    along with the prescribed fees to the registrar.

    The application for registration must have the following: -

    1. The name of the firm


    2. The place or principal place of business of the firm;
    3. The name of any other place where the firm carries on business;
    4. The date on which each partner joined the firm;
    5. The duration of the firm;
    6. The full names and addresses of the partners;
    7. The statement shall be signed by all the partners or by their agent on their behalf.

    Once the registrar is satisfied that the due procedure has been complied with, he shall record
    an entry of the statement in the register of firms and issue a certificate of registration.

    CONSEQUENCES OF NON-REGISTRATION

    Sec 69 of the Indian Partnership Act lays down following consequences or effects: -

    1.No suit by a partner

    Under Section 69(1), a partner or any person on his behalf cannot file a suit against the firm
    or any person alleged to be a partner of the firm to enforce a right arising from a partnership
    contract or under the Partnership Act unless the firm is a registered one and the person has his
    name filed as a partner in the register of firms as held in the case of Jagat Mittar Saigal v.
    Kailash Chander Saigal. Thus, if a firm is unregistered or the name of a partner isn’t lodged
    in the register of firms, that partner cannot sue the firm or another partner of the firm if any of
    his rights are violated.

    2.No suit by the firm

    Under Section 69(2), a firm or any other person on its behalf cannot file a suit against a third
    party for enforcing any contractual rights unless that firm is a registered one as held in the
    case of Beacon Industries v. Anupam Ghosh and Bharat Sarvodaya Mills Co. Ltd v. M/s
    Mohatta Brothers. This can be overcome only by registration of the firm before filing a suit.
    No such disability has been imposed upon a third party. Any person can bring a suit even
    against an unregistered firm or any of its partners.

    3.No claim of set-off or other proceedings to enforce a right arising from a contract

    Under Section 69(3), a claim of set-off or any other proceeding to enforce a right arising from
    a contract cannot be filed unless the firm is a registered firm. A set-off is an equitable defence
    to the whole or to a portion of a plaintiff’s claim. It is the right of a debtor to balance mutual
    debts with a creditor. Other proceedings include arbitration proceedings. So, if in a dispute,
    one of the partners referred the matter to arbitration as per the agreement clause but the other
    partner did not agree, the suit to enforce the arbitration agreement would fail as the firm
    wasn’t a registered firm as held by the Supreme Court in the case of Jagdish Chandra
    Gupta v. Kajaria Traders (India) Ltd.

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