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Xpert
11-30-2011, 09:01 PM
Registrations of a firm

Q. What are contents of application for registration of a firm? What are the effects of non-registration.
1. Introduction:
The person who have entered into a partnership with one another are called collectively a firm. So a firm is collective name of the individual forming it. The registration of firm is optional. It does not create partnership rather it is evidence of existence of partnership.
2. Registration of a firm:
The registration of a firm is not compulsory. It is better to register it as soon as it is formed. There is no penalty for non registration.
3. Procedure of registration of firm:
The procedure is as under.
(I) Application:
For the registration of a firm application in the prescribed form is filed.
(II) Prescribed fee:
Prescribed fee is paid along with application.
(III) Where application is filed:
Application for the registration of firm is filed in the office of registrar.
(IV) Time of registration:
Firm can be registered at any time.
(V) Modes of filing application:
Application can be filed through:
(i) By post
(ii) By hand
(VI) Contents of application:
Following are the contracts of application.
(a) Name of firm:
The partners can choose any name according to the following rules.
(i) The name must not be identical or similar to the name of existing firm.
(ii) The name must not contain words government, Jinnah, Quaid-e-Azam, or words showing the approval or patronage of the federal government or any provincial government, without the consent of provincial Govt.
(iii) A firm name must not contain, the name of ‘united nations’ or abbreviations of its subsidiary body without the sanction of secretary general of U. N.
(iv) A firm name must not contain the name of the “world health organization or its abbreviations without the sanction of the director general of who.
(v) A firm must not contain any word, which may be declared by the provincial government as undesirable.
(b) Business place:
It shall contain name of business place.
(c) Other places:
The names of other places where the carries on business.
(d) Date of joining of partner:
The application shall contain the date of joining the firm.
(e) Names and addresses of partners:
The names and addresses of the partners firm.
(f) Duration of firm:
The duration of firm if any.
(g) Signature:
The application shall contains the signature of all the partners.
(h) Verification:
Every partner shall verify the application.
(VII) Satisfaction of registrar:
The register will examine the application and satisfy about the particulars application.
(VIII) Certificate of registration:
After examination if the registrar is satisfied he will register the firm and issue certificate of the registration of a firm.
(IX) Change of particulars:
If any change takes place in the particulars, registrar will be informed.
(X) Penalty for false particulars:
A person; who provides false information to the registrar, shall be punishable with imprisonment, which may extends to three months, or with fine or with both.
4. Effect of non-registration:
Following are the effect of non-registration of a firm.
(I) Suit by partner:
A partner of unregistered firm cannot sue the firm or any of the present or past co-partners for the enforcement of any right.
(II) Suit by firm:
An un-registered firm can not file a suit against the third party for the enforcement of any right.
(III) Suit by third party:
A third party can file a suit against the firm or it’s partner to enforce his rights.
(IV) No right of set off:
An un-registered firm or partner can not claim a right of set off in proceedings instituted against third party.
Exceptions:
Non-registration does not effect the following.
(i) Unregistered firm and it partner can sue for the dissolution of the firm.
( ii) The third party can always sue whether registered or not.
(iii) The partner can sue for the accounts of dissolved firm.
(iv) The partners can sue for the realization of the property of a dissolved firm.
(v) The dissolved firm can sue to recover damages for breach of contract.
(vi) The partner can refer a dispute to arbitrator.
(vii) The receiver of an insolvent partner can sue for the realization of insolvent’s share.
5. Case law
1994 MLD 274
It was held that partnership act dose not make registration of a firm compulsory partner can enter into partnership either in writing or orally or get the firm registered. The effect non-registration of a firm would suffer from legal disability in filing suits against parties and as against one another under partnership act.
6. Importance and advantages of the registration of a firm:
(i) Concession in income tax by tax authorities.
(ii) Settlement of disputed.
(iii) Protection of the right of the partners.
(iv) The firm can use trade mark.
(v ) Firm can files suit against third party.
7. Object:
The object of registration from is to protect the rights of third party.
8. Conclusion:
To conclusion it can be said that, partnership of a firm is not compulsory. It is only proof a existence of the firm. The procedure of the registration of a firm is very simple. The effect of non-registration of a firm with the register of firm would be that the partnership and its partner would suffer from legal disability in filing suit against any partner and as against one another.