Indian Partnership Act
Registration of Firms: Sections 56 to 68
Registration of a firm is optional in form but essential in practice. The Act does not compel it, and non-registration does not make the firm illegal or void. But Section 69 attaches such serious disabilities to an unregistered firm that most firms register. Chapter VII sets out the machinery: the Registrar, the application under Section 58, the entry under Section 59, the recording of changes, corrections, inspection, and the evidentiary value of the register. This note covers Sections 56 to 68; Section 69 has its own note.
The registration pipeline from Section 56 to Section 68, and registration of the firm compared with registration of the deed
1. Is Registration Compulsory?
§ The position • Not compulsory. The Act nowhere requires a firm to be registered. • Not a condition of validity. An unregistered firm is a perfectly valid partnership; its contracts are good and its partners are liable. • But strongly encouraged. Section 69 disables an unregistered firm from suing on its contracts, and a partner from suing the firm or his co-partners, which makes registration a practical necessity. • Any time. A firm may be registered at formation or later; there is no time limit and no penalty for delay, though a suit filed before registration is not saved by registering afterwards. |
2. The Machinery: Sections 56 to 59
Section | What it provides |
|---|---|
s. 56: power to exempt | The State Government may, by notification, exempt from the application of this Chapter any firm or class of firms in the State |
s. 57: the Registrar | The State Government may appoint Registrars of Firms, and define the areas within which they exercise their powers; every Registrar is deemed a public servant |
s. 58: the application | A statement in the prescribed form, with the prescribed fee, sent to the Registrar of the area, stating the firm name; the principal place of business and other places; the date on which each partner joined; the names in full and permanent addresses of the partners; and the duration of the firm; signed and verified by all the partners or their specially authorised agents |
s. 58(3): name restriction | The firm name shall not contain words expressing or implying the sanction, approval or patronage of Government, except with the State Government's written consent |
s. 59: the entry | When satisfied that Section 58 has been complied with, the Registrar records an entry of the statement in the Register of Firms and files the statement; registration is then complete |
3. The Application in Detail: Section 58
Particular | What it means |
|---|---|
Firm name | The name under which the business is carried on, subject to Section 58(3) |
Principal place of business | The head office of the firm |
Other places of business | Branches and other places where business is carried on |
Date each partner joined | So that liability for acts before and after each partner's entry can be worked out |
Names and permanent addresses of partners | The full names and permanent addresses of all the partners |
Duration of the firm | Fixed term, at will, or for a particular venture |
Signature and verification | By all the partners, or their agents specially authorised in this behalf, verified in the prescribed manner |
4. Recording Changes: Sections 60 to 63
Section | Change to be recorded |
|---|---|
s. 60 | Alteration in the firm name or in the principal place of business, which requires a fresh statement signed and verified by all the partners, with the fee |
s. 61 | Opening or closing of a branch or other place of business |
s. 62 | Change in the name or permanent address of any partner |
s. 63(1) | Change in the constitution of the firm, that is, a partner coming in or going out, and the dissolution of the firm; notice may be given by an incoming, continuing or outgoing partner as the case requires |
s. 63(2) | Election by a person who was admitted as a minor to become or not to become a partner on attaining majority |
- Why keep it current. Section 69(2) requires the persons suing to be shown in the register as partners; an unrecorded change of partners can defeat a later suit.
5. Corrections, Access and Proof: Sections 64 to 68
Section | What it provides |
|---|---|
s. 64: rectification of mistakes | The Registrar may at any time rectify mistakes in order to bring an entry into conformity with the documents relating to that firm, and rectify a mistake in a document filed |
s. 65: amendment by the court | A court deciding a matter relating to a firm may direct that the Registrar amend the entry relating to that firm |
s. 66: inspection | The Register of Firms and the documents filed are open to inspection on payment of the prescribed fee |
s. 67: certified copies | The Registrar shall, on payment of the prescribed fee, grant a certified copy of any entry or part of an entry in the Register of Firms |
s. 68: rules of evidence | Any statement, intimation or notice recorded or noted in the Register of Firms is, as against any person by whom it was signed, CONCLUSIVE PROOF of any fact stated in it; and a certified copy of an entry may be produced as evidence of any such fact |
6. Advantages of Registration
§ Why firms register • The firm can sue third parties to enforce its contractual rights, which Section 69(2) otherwise bars. • A partner can sue the firm and the other partners to enforce his rights, which Section 69(1) otherwise bars. • The firm can plead set-off and enforce contractual claims in other proceedings. • The register is evidence of who the partners are, under Section 68, which helps in dealings and in litigation. • Credibility. Banks, suppliers and government departments often prefer to deal with a registered firm. |
7. Registration of the Firm and of the Deed
i. Registration of the firm is a filing with the Registrar of Firms under Chapter VII; it is optional, with the Section 69 consequences.
ii. Registration of the deed under the Registration Act, 1908 is a different matter, and is required only where the deed itself creates or transfers an interest in immovable property.
iii. Do not confuse them. A firm may be registered under the Partnership Act though its deed is not registered under the Registration Act, and vice versa.
8. Frequently Asked Questions
Is registration of a partnership firm compulsory?
No. It is optional, and non-registration does not make the firm invalid; but Section 69 disables an unregistered firm from suing on its contracts.
Where and how is a firm registered?
By sending the Registrar of Firms of the area a statement under Section 58, signed and verified by all the partners, with the prescribed fee; the Registrar then records an entry under Section 59.
What is the evidentiary value of the Register of Firms?
Under Section 68, a recorded statement is conclusive proof, as against the person who signed it, of the facts stated, and a certified copy is admissible as evidence.
Is registration of the firm the same as registration of the deed?
No. Registration of the firm is under the Partnership Act; registration of the deed under the Registration Act is needed only if the deed transfers immovable property.