Partnership firm can register themselves under Indian Partnership Act,1932.
1. Short title, extent and commencement (1) This Act may be called the Indian Partnership
Act, 1932. It extends to the whole of India
It shall come into force on the 1st day of October, 1932, except section 69, which shall come
into force on the 1st day of October, 1933.
2. Definitions—In this Act, unless there is anything repugnant in the subject or context
(a) An“act of a firm” means any act or omission by all the partners, or by any partner or agent
of
the firm which gives rise to a right enforceable by or against the firm;
(b) “business” includes every trade, occupation and profession;
(c) “prescribed” means prescribed by rules made under this Act;
(d) “third party”, used in relation to a firm or to a partner therein, means any person who is
not a partner in the firm; and
(e) expressions used but not defined in this Act and defined in the Indi
In India we have two types of partnership firm Registered and Unregistered
Key difference between a Registered partnership firm and Unregistered
| BASIS | REGISTERED | UNREGISTERED |
|---|---|---|
| PROVISION UNDER INDIAN PARTNERSHIP ACT, 1932 | It is registered under Indian Partnership Act, 1932 and all the provisions under this act will apply to it. | It is not registered under any act and will not get any benefits from the provision of this act. |
| CREDIBILITY & TRUSTWORTHY | As this is a registered firm, credibility among customers in the market will increase and customers will trust them more easily compared to an unregistered firm. | It will be harder and take more time to build credibility and trust among customers. |
| CONVERSION | This can be easily converted into an LLP or Private Limited Company. | An unregistered firm needs to register first before it can be converted into an LLP or Private Limited Company. |
| Tax Benefits | A registered firm and its partners can claim income tax benefits and do not have to pay double tax. | Unregistered firms cannot claim any tax benefits as they are not registered. |
| Legal Protection | This firm can sue and be sued in court in its firm name against third parties. | Unregistered firms cannot file cases against third parties, although others can sue them. |
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