Partnership
Querist :
Anonymous
(Querist) 21 May 2010
This query is : Resolved
My client is a partner in a unregistered partnership firm in uttaranchal. The firm is dissolved wef 31-03-2010. During the period of partnership my client has not provided any detail of accounts of the firm, now the other partners required him to pay his share of liability without any detail of accounts and how the loss was uncured & issued him a notice to pay his share upto 15 june 10 otherwise they may take a legal action against him.I want to know what are the legal rights provided to my client & what steps he should take?
A V Vishal
(Expert) 21 May 2010
Registration of firm is not compulsory, though usually done as registration brings many advantages to the firm. Since ‘partnership contract’ is a ‘Concurrent Subject’ as per Constitution of India, registration of firms and related work is handled by State Government in each State. Section 71 authorises State Government to make rules for prescribing fees for filing documents with registrar, prescribing forms of various statements and intimations are to be made to registrar and regulating procedures in the office of Registrar.
Partner cannot sue if firm is unregistered - No suit to enforce a right arising from a contract or conferred by this 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 an{ person alleged to be or to have been a partner in the fir} 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.[section 69(1)]. Thus, a partner cannot sue the firm or any other partner if firm is unregistered. If third party files suit against a partner, he cannot claim of set off or institute other proceeding to enforce a right arising from a contract. Suit or claim or set off upto Rs 100 can be made as per section 69(4)(b), but it is negligible in today’s standards. Criminal proceedings can be filed, but civil suit is not permissible.
