Table of Contents
Section 58: Application for Firm Registration
Under Section 58 of the Indian Partnership Act, 1932, a firm may be registered by submitting or mailing a duly filled form along with prescribed fees to the Registrar of Firms in the area where the business is located.
The application must include the following details:
- Name of the Firm
- Principal Place of Business
- Other Places Where the Firm Carries On Business
- Date When Each Partner Joined the Firm
- Names and Addresses of All Partners
- Duration of the Firm (if any)
Restriction on Firm Names: Names containing the following words are prohibited unless Government approval is obtained:
“Crown”, “Emperor”, “Empress”, “Empire”, “Imperial”, “King”, “Queen”, “Rayal”
Section 59: Registration of the Firm
Once the registrar is satisfied with the application and its contents, the firm is officially registered under Section 59.
Section 69: Effects of Non-Registration
Although registration is not compulsory, an unregistered firm faces certain legal disabilities as per Section 69 of the Act. Section 69 deals with the effect of non registration which are as follows :
1. Suit Between Partners and the Firm
Partners of an unregistered firm cannot sue each other or the firm to enforce contractual rights.
Case: Mahendra v. Tej Ram (AIR 1987 All 152)
A partner filed an injunction suit regarding cheque payments, but the firm was unregistered. The court held that the suit was barred under Section 69.
2. Suit Between Firm and Third Parties
An unregistered firm or its partners cannot sue any third party to enforce rights arising from a contract.
Case: Muthu Kumaraswami v. Kumar Textiles (AIR 1996 Mad 433)
In this case it has been held that the provision contained in Section 69(2) is mandatory in nature and registration is compulsory for initiating suit.
Exceptions to the Above Rules
- Suit for dissolution of the firm
- Suit on behalf of an insolvent partner
- Where the registration requirement is not applicable
- If the value of the suit does not exceed ₹100
Section 70: Penalty for False Statements
Section 70 of the Indian Partnership act, 1932 provides that if any person knowingly furnishes false particulars in the registration application, they are punishable under Section 70 with:
- Imprisonment up to 3 months, or
- Fine, or
- Both
References:
- Indian Partnership Act, 1932- Bare Act
- Contract Law-I by R.K. Bangia
