If registration is optional, why do partnership firms willingly go through this legal formality and get themselves registered? Explain.
If registration is optional, why do partnership firms willingly go through this legal formality and get themselves registered? Explain.
Although registration in case of a partnership firm is optional yet many firms voluntarily opt for it. This is because of the various legal disadvantages associated with non-registration. A few of these disadvantages are listed below.
(a) The partners of a non-registered firm cannot file a suit against a third party; however, non-registration of a partnership firm does not prevent other firms from suing it .
(b) The firm cannot file a case against any of its partners. Similarly, a partner of a non-registered firm cannot file a case against his or her co-partners or the firm.
(c) A non-registered partnership firm cannot enforce its claims against a third party in a court.
Although registration in case of a partnership firm is optional yet many firms voluntarily opt for it. This is because of the various legal disadvantages associated with non-registration. A few of these disadvantages are listed below.
(a) The partners of a non-registered firm cannot file a suit against a third party; however, non-registration of a partnership firm does not prevent other firms from suing it .
(b) The firm cannot file a case against any of its partners. Similarly, a partner of a non-registered firm cannot file a case against his or her co-partners or the firm.
(c) A non-registered partnership firm cannot enforce its claims against a third party in a court.
