Affiliated Law College of IUB
Q. What are contents of application for registration of a firm? What are the effects of
non-registration of a firm?
1. Introduction
The Act does not make registration compulsory. It does not say that you must register. Nonregistration does affect some rights but there are some rights that are not affected by nonregistration. Registration creates a strong piece of evidence about the existence of partnership.
Registration and non-registration does not concern with legal status of a partnership. A nonregistration cannot be called illegal firm.
2. Contents of the Registration Application
Section 58 of the Act requires that the registration of a firm may be effected at any time by
sending by post or delivering to the Registrar of area on which any place of business of the firm
is situated or proposed to be situated, a statement in the prescribed form and accompanied by
the prescribed fee, stating as under:
a.
b.
c.
d.
e.
f.
The firm name
The place or principal place of business of the firm
The names of any other places where the firm carries on business
The date when each partner joined the firm
The names in full and permanent addresses of the partners , and
Duration of the firm
The statement shall be signed by all the partners or by their agents specially authorized in this
behalf.
This section further presents some rules regarding about name; it must not be identical or
similar to the previously existing firm name or words like Jinnah, Quaid-e-Azam or Government
and so on and name should also not be identical to any other existing organisation or
department.
3. Effect of Non-Registration
The result of non-registration is that:
a. A partner cannot sue the firm
b. The firm cannot sue third parties to enforce a right arising from a contract
c. If the firm is sued by third parties it cannot plead a set-off
Partnership Act by Yasir Arfat
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Affiliated Law College of IUB
d. An individual partner can sue third parties, but not on behalf of the firm
e. Subsequent registration cannot cure an earlier defect
f. Firm cannot file a suit for arbitration
4. Rights and Matters not Affected by Non-Registration
The following matters and rights are not affected by non-registration:
a. Non-registration does not affect the existence of the firm
b. The firm remains liable to be sued by persons outside it. Third party can sue it
c. The has right to file a suit for enforcing rights not arising out of contract, for example, to
seek an injunction against a person wrongfully using the firm name, and also for
infringement of trademarks and partners
d. Individual partners can sue for the dissolution of the firm and for rendition of accounts
e. Non-registration does not render the firm illegal
5. Certificate of Registration
Section 59 states that when the Registrar is satisfied that the provisions of Section 58 have
been duly complied with, he shall record an entry of the statement in a register called the
Register of Firms, and shall issue certificate of the registration of a firm.
6. Conclusion
Registration of firm is although optional but it gives a strong protection of rights to its partners
and firm. It is an irrefutable evidence of its existence. Non-registration may create a lot of
problem in some cases.
Partnership Act by Yasir Arfat
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