CPT MERCANTILE LAW CHAPTER -3 THE INDIAN PARTNERSHIP ACT ,1932

CA. DIPTI LUNAWAT

Registration and Dissolution of a Firm Unit 3 Part [1/4]

MODES OF EFFECTING REGISTRATION

CONSEQUENCES OF NON- REGISTRATION

DISSOLUTION OF FIRM

CONSEQUENCES OF DISSOLUTION

MODES OF GIVING PUBLIC NOTICE

Learning Objectives

Mode of Registration

BY SENDING BY POST

OR DELIVERING STATEMENT IN

PRESCRIBED FORM.

AREA WHERE PRINICPAL PLACE OF

BUSINESS IS SITUATED

SIGNED BY ALL PARTNERS OR

AGENTS AUTHORIZED.

Content of Statement for Registration

FIRM’S NAME PRINICPAL PLACE OF BUSINESS

NAME OF OTHER PLACE OF BUSINESS

DATE OF JOINING OF PARTNERS

FULL AND PERMANENT ADDRESS OF

PARTNERS

DURATION OF FIRM

Registration Certificate

Registrar is satisfied , Sec.

58 duly complied

Record an entry in register of

firms

Issue registration certificate

When Registration is Complete

Date of Filing of duly signed and

verified statement along with prescribed form & fees.

Important Points of Registration

RECORDING OF AN ENTRY IN REGISTER OF FIRMS IS ROUTINE DUTY

SUBSEQUENT ALTERATIONS MUST BE REGISTERED

REGISTRATION CAN BE EFFECTED ANYTIME

Consequences of Non Registration

NO SUIT IN BY FIRM AGAINST THIRD PARTY

NO RIGHT TO CLAIM SET –OFF OF IN EXCESS OF

RS.100

NO SUIT BY A PARTNER AGAINST FIRM OR OTHER

PARTNERS

Right not Affected by Non-Registration

THIRD PARTY CAN SUE FIRM

SUE FOR DISSOLUTION

POWER OF OFFICIAL ASSIGNEE

SUE OR CLAIM A SET-OFF LESS THAN RS. 100

Requirement for Filing Suit by Firm

Registered Firm Registered

Partners

Suit Maintainable by Non Registered Firm

Suit Filled by Non Registered

Rejected

Register the Firm & File a

Fresh Suit

Questions

Questions On Modes of Registration & Effects of

Non- Registration

Question No.1

Though the registration of a firm is optional, yet indirectly it becomes necessary due to the reason that.

A] A firm legally comes into existence only on registration.

B] A firm can deal with third parties only on registration.

C] The disabilities due to non-registration are removed only on registration.

D] Both (A) and (B)

Ans C

Question No.2

The prescribed application form for registration of the firm should be deposited with the Registrar of Firms of that area.

A] Which is convenient for partners.

B] In which the working partner of the firm resides.

C] In which any place of business of firm is situated or proposed to be situated.

D] Which is agreed by all the partners for the purposes of registration.

Ans C

Question No.3

Which of the following statement, about the registration of a firm is incorrect

A] It may be effected before filing a suit against third party.

B] It may be effected at any time after its formation.

C] It may be effected at the time of its formation

D] It must be effected at the time of its formation.

Ans D

Question No.4

As per the accepted view, the registration of the firm is considered complete when

A] Complete application for registration is filed with the Registrar.

B] Registrar files the statement and makes entries in the “ registrar of firms”.

C] Registrar gives notice of registration to all the partners.

D] Court records the statement and certifies the entries in the registrar of Firms.

Ans B

X, Y and Z are partners in a unregistered firm. X steals the property of the firm. Y filed a suit against X. X resisted Y’s claim on the plea that firm is not registered. Will Y Succeed?

Yes

Question No.5

An unregistered firm goods to W on credit. On the expiry of the term of credit, the firm filed a suit against W for the recovery of the amount due from W. Will the firm succeed? What difference would it make if immediately after filling the suit, the firm got itself registered?

ANSWER : -

Firm cannot succeed as , firm is not registered at the time of institution of suit

It would not make any difference as subsequent registration cannot cure initial defect.

Question No.6

X, Y and Z are partners in a registered firm. X died. The firm filed a suit against W in the name and on behalf of firm without notifying to the Registrar of firms about the changes in the constitution of the firm. Is the suit maintainable?

Yes as both the conditions are satisfied

Question No.7

X, Y and Z are partners in a registered firm. X died. D was admitted as a partner. The firm filed a suit against W in the name and on behalf of firm without notifying to the Registrar of firms about the changes in the constitution of the firm. Is the suit maintainable?

No

Question No.8

An unregistered firm sold goods worth Rs. 1000 to W who gave a cheque which was dishonored. X, a partner demanded money from W who paid only 50% . In the mean time, the firm was dissolved. X sued W for the recovery of balance. Will he succeed?

Yes , Non Registration does not affect transactions in dissolution.

Question No.9

Question No.10

XYZ a partnership firm was constituted on 01.04.2008. on 25th April the partners resolved to get the firm registered with the Registrar of Firm. The Firm prepared the necessary documents for registration on 26th April which were signed on 28th April. They send the documents to the Registrar Office on 30th April by Registered post which was received in the Registrar Office on 4th may, 2008. The firm will be deemed to have been registered on:

A] 30th April

B] 28Th April

C] 20Th May

D] 4Th May

Ans A