Is registration of partnership firm compulsory?

Since you are not required to fulfill complex business formalities, a partnership is simple to form. In India, the Partnership Act, 1932 regulates the registration of partnership firms. A minimum of two persons is needed for the partnership firm’s registration. But is registration of partnership firm compulsory? Let’s find out:

As per the Indian partnership Act, 1932 (Section 58), a firm may be registered at any time by filing an application with the Registrar of Firms of the locality in which the firm’s business is located or proposed to be located. Do you know whether the registration of a partnership firm is compulsory or not? Well, let me tell you that the registration of a partnership firm is not compulsory. There are no penalties for non-registration as it’s optional for partners to get the firm registered.

• The firm can’t claim adjustment for any amount more than Rs. 100. Let’s say an unregistered firm owes Rs.1500 to Simran and Simran owes Rs.1100 to the firm. Then, in this case, the firm can’t enforce an adjustment of Rs. 1100 in the court.

• A partner of a non-registered firm can’t file suit against any other partner.

• Partners of a non-registered firm can’t file any suit to enforce a right against the firm.

• It can’t file a legal suit against any of its partners

• It can’t enforce its claims against the third party in the court.

I hope you like my answer on registration of partnership firm is compulsory or not. Thanks!