Question

If registration is optional, why do partnership firms willingly go through this legal formality and get themselves registered? Explain.

Answer 1

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. Some of them are:

• 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
• 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.
• A non-registered partnership firm cannot enforce its claims against a third party in a court.