When it is not registered, a partnership firm is _____________________.

deemed to be an illegal association and is disallowed to carry on business

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allowed to carry on business subject to payment of penalty

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allowed to carry on business subject to certain disabilities

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allowed to carry on business only with the special permission of the Registrar of Firms

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Solution

The correct option is C allowed to carry on business subject to certain disabilities
Registration of partnership is not compulsory under law. But if a partnership firm is not registered, it can not file a suit against the third party. No partner can file a suit against any other partner. The firm can not file a suit against any partner. But third party can file a suit against the firm.

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