Question
• Is the registration of a Partnership Firm
compulsory in India?
Answer
• Sections 56 to 71 of The Partnership Act, 1932, deal
with the registration of partnership firms.
• However, these provisions do not make the
registration of firms compulsory.
• Registration of a firm is optional and there is no
penalty for non-registration.
• But Section 69 lays down some disabilities for
unregistered firms.
Appointment of Registrars (Section 57)
• The State Government may appoint Registrars
of Firms for the purposes of this Act, and may
define the areas within which they shall
exercise their powers and perform their duties.
• Every Registrar shall be deemed to be a public
servant within the meaning of Section 21 of the
Indian Penal Code.
Procedure for Registration
• Application for Registration (Section 58)
• Registration (Section 59)
Application for Registration [Section 58(1)]
• The registration of a firm may be effected at any time by
sending by post or delivering to the Registrar of the area in
which any place of business of the firm is situated or
proposed to be situated, a statement in the prescribed form
and accompanied by the prescribed fee, stating—
• (a) the firm name,
• (b) the place or principal place of business of the firm,
• (c) the names of any other places where the firm carries on
business,
• (d) the date when each partner joined the firm,
• (e) the names in full and permanent addresses of the
partners, and
• (f) the duration of the firm.
Requirement of Signatures
[Section 58(2)]
• The statement shall be signed by all the
partners, or by their agents specially
authorised in this behalf.
• Each person signing the statement shall also
verify it in the manner prescribed.
Restriction on Use of Certain
Words [Section 58(3)]
• A firm name shall not contain any of the following
words, namely:—
• “Crown”, “Emperor”, “Empress”, “Empire”,
“Imperial”, “King”, “Queen”, “Royal”, or words
expressing or implying the sanction, approval or
patronage of Government,
• except when the State Government signifies its
consent to the use of such words as part of the
firm name by order in writing.
Time Limit for Registration
• No time limit is prescribed within which a firm can
be registered.
• A firm can be registered at any time after its
formation.
• The Registrar of Firms cannot reject an application
for registration of a firm on the ground of inordinate
delay.
Question
• If a registered firm is dissolved and
reconstituted after the death, expulsion
or retirement of a partner, is it
mandatory to register the reconstituted
firm?
Noble Kurien vs Sebastian Antony and
Others (AIR 2010 Kerala 99)
• The Kerala High Court held that no separate
registration is required in case of reconstitution of a
firm.
• Only an intimation to the Registrar of Firms about
the reconstitution/change is required.
Alteration in Firm Name and Principal
Place of Business [Section 60(1)]
• When an alteration is made in the firm name
or in the location of the principal place of
business of a registered firm, a statement
may be sent to the Registrar accompanied by
the prescribed fee, specifying the alteration,
and signed and verified in the manner
required under Section 58.
Amendment of Entry in Register of
Firms [Section 60(2)]
• When the Registrar is satisfied that the
provisions of sub-section (1) have been duly
complied with, he shall amend the entry
relating to the firm in the Register of Firms in
accordance with the statement, and shall file
it along with the statement relating to the
firm filed under Section 59.
Closing and Opening of Branches
[Section 61]
• When a registered firm discontinues business at
any place or begins to carry on business at any
place, such place not being its principal place of
business, any partner or agent of the firm may
send intimation thereof to the Registrar, who shall
make a note of such intimation in the entry
relating to the firm in the Register of Firms, and
shall file the intimation along with the statement
relating to the firm filed under Section 59.
Changes in the Names and Addresses
of Partners (Section 62)
• When any partner in a registered firm
alters his name or permanent address,
an intimation of the alteration may be
sent by any partner or agent of the firm
to the Registrar, who shall deal with it in
the manner provided in Section 61.
Changes in/Dissolution of a Firm
[Section 63(1)]
• When a change occurs in the constitution of a registered
firm, any incoming, continuing or outgoing partner, and
when a registered firm is dissolved, any person who was
a partner immediately before the dissolution, or the
agent of any such partner or person specially authorised
in this behalf, may give notice to the Registrar of such
change or dissolution, specifying the date thereof.
• The Registrar shall make a record of the notice in the
entry relating to the firm in the Register of Firms, and
shall file the notice along with the statement relating to
the firm filed under Section 59.
Withdrawal of a Minor [Section 63(2)]
• When a minor who has been admitted to the
benefits of partnership in a firm attains majority
and elects to become or not to become a
partner, and the firm is then a registered firm,
he, or his agent specially authorised in this
behalf, may give notice to the Registrar that he
has or has not become a partner, and the
Registrar shall deal with the notice in the
manner provided in sub-section (1).
Effects of Non Registration
(Section 69)
• Effect on suits by partners against each other
(A suit can be filed by one partner against another
only if the firm is registered and the name of the
person suing is mentioned in the Register of
Firms).
• Effect on suits by firm against third parties (A suit
cannot be filed by a firm against a third party if the
firm is not registered).
Effect on Suits by Partners against
Each Other [Section 69(1)]
• No suit to enforce a right arising from a contract or
conferred by this Act shall be instituted in any
Court by or on behalf of any person suing as a
partner in a firm against the firm or any person
alleged to be or to have been a partner in the firm
unless the firm is registered and the person suing
is or has been shown in the Register of Firms as a
partner in the firm.
Effect on Suits by Firm against Third
Parties [Section 69(2)]
• No suit to enforce a right arising from a
contract shall be instituted in any Court by
or on behalf of a firm against any third
party unless the firm is registered and the
persons suing are or have been shown in
the Register of Firms as partners in the
firm.
Overriding Effect of Section 69(3)
• The provisions of sub-sections (1) and (2) shall not
affect—
• (a) the enforcement of any right to sue for the
dissolution of a firm or for accounts of a dissolved
firm, or any right or power to realise the property
of a dissolved firm; or
• (b) the powers of an official assignee, receiver or
Court under the Presidency-towns Insolvency Act,
1909, or the Provincial Insolvency Act, 1920, to
realise the property of an insolvent partner.
Question
• Whether Section 69(2) of The Indian
Partnership Act, 1932, prevents a partner
of an unregistered firm from filing a
Criminal/Quasi Criminal case against a
third party?
M/s Beacon Industries vs Anupam Ghosh
[2005(1) ALD Cri 6] (Facts)
• The petitioner firm, represented by its partner, filed a
cheque bounce complaint to the Magistrate under Section
200 of the Criminal Procedure Code, 1973, against the
respondent under Section 138 of the Negotiable
Instruments Act, 1881.
• The respondent contended that the complaint is not
maintainable as Section 69 of the Indian Partnership Act,
1932, bars a private complaint by a partner of an
unregistered firm.
• The trial Court dismissed the complaint and the matter
reached the Karnataka High Court.
• What should be the decision in this case?
Decision
• The Karnataka High Court held that an unregistered
partnership firm is barred from filing a civil suit under
Section 69(2).
• However, there is no bar as such to file a private
complaint for a criminal matter.
• In cases of cheque bounce, there is purely criminal liability
on the part of the person who has issued the cheque.
• Therefore, the contention of the respondent that filing of
a criminal complaint by a partner of an unregistered firm
is hit by Section 69(2) of the Partnership Act cannot be
accepted.
