Partnership emerges out of the agreement between the partners which may be oral or written. A written agreement of partnership is always desirable in order to avoid any dispute. An agreement of partnership specifies all terms and conditions as regards the operation of the partnership business so that the mis-understandings can be avoided.

When once a few partners agree to start a partnership business, they sign a partnership deed, and at once the partnership firm comes into being, and such a partnership firm will have its own name.

The partners in such a firm may be active partners and some others may be sleeping partners.

Registration of Partnership Firm:


The Indian Partnership Act, 1932 provides for the registration, but this is not compulsory. A Partnership firm can be registered at any time at the option of the partners.


A statement in the prescribed form which is duly signed by all partners must be submitted to the Registrar of firms along with the prescribed fee. The statement should contain the following particulars.

1. Name of the firm


2. Principal place of the business of the firm.

3. Names of other places, where the firm carries on business.

4. Dates on which the different partners joined the firm.

5. The full name and address of the all partners.


6. Duration of the firm.

If the Registrar is satisfied that the statement is duly complied with the Partnership Act, he will enter the particular statement in a Register called the Register of Firms.

Effects of Non- Registration:

Though registration is not compulsory, it is always desirable to get the partnership firm registered. This is because; an unregistered firm suffers with the following drawbacks.


a. An unregistered firm cannot file a suit in the court of law against the third party for recovery of debts.

b. It cannot file a suit against any partner for recovery of debts.

c. A third party can file a suit against an unregistered firm or a partner.

d. Partners of unregistered firm cannot sue the firm or enforce their claims against each other.