GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Allowed to carryon business subject to certain disabilities
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Allowed to carryon business subject to payment of penalty
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Deemed to be an illegal association and is disallowed to carryon business
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Allowed to carry on business only with the special permission of the Registrar of Firms
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Detailed explanation-1: -Registration of partnership is not compulsory under law. But if a partnership firm is not registered, it can not file a suit against the third party. No partner can file a suit against any other partner. The firm can not file a suit against any partner.
Detailed explanation-2: -If the firm registration is not done, then the firm or any other person on its behalf cannot file a suit against a third party for breach of contract which the firm has entered into. Further, the person filing the suit on behalf of the firm should be in the register of the firm as a partner.
Detailed explanation-3: -In an unregistered partnership firm, a partner cannot take any legal action against a co-partner. Any breach of contract or conflicts of interest cannot be addressed by the law in the case of unregistered partnership firms. In an unregistered partnership firm, the partners cannot enforce their rights.
Detailed explanation-4: -A partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.
Detailed explanation-5: -As per the Indian Partnership Act, 1932, it is not compulsory to register a partnership firm as the firm does not have a separate legal entity. However, having a registration will make it definite that the firm exists legally.