Partnership Act of 1932 deals with partnership firms. Under this Act (see Section 58), it is not mandatory to register a partnership firm. It is optional. However, registration of a firm may have some advantages, such as – it may formalise the relationship and may create more certainty for the partners and those who deal with them.
There are also certain disadvantages of non-registration of the partnership firm. For example, Section 69 of the Partnership Act, inter alia, lays down that no suit to enforce a right arising from a contract or conferred by that Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm. Likewise, no suits to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.
Therefore, while it is not mandatory to register the partnership firm, it is generally desirable to register it.
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