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Difference-between-Registered-Partnership-Firm-or-Non-Registered-partnership-firm

 

Difference between Registered Partnership Firm or Non-Registered partnership firm

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Introduction-

Partnership firms in India are established and governed under the provisions of Indian Partnership Act 1932 (referred as “ACT”). Partnership firms in India may be registered or may be non-registered. It is not compulsory to register under the Indian Partnership ACT 1932. The benefits for registering partnership firms as prescribed under section 69 of the Indian Partnership Act, 1932. The Registered firms are more reliable as compared to non-registered firms.

 

Difference Chart as under-

Particulars

Registered Partnership Firm

Non-Registered Partnership Firm

Provision of Indian Partnership Act 1932 (referred as “ACT”)

The said partnership firms are registered and established under the provision of Indian Partnership Act 1932 (referred as “ACT”), so the provisions of Indian Partnership Act 1932 apply.

The said partnership firms are not registered and established under the provision of Indian Partnership Act 1932 (referred as “ACT”), so the provisions of Indian Partnership Act 1932 do not apply.

Trustworthiness and reliable

The incoming partner can rely on trustworthiness of the other partners.

The incoming partner cannot rely on trustworthiness of the other partners.

Power to suit to file case against Third Parties

Power to suit to enforce a right arising from a contract shall be instituted, by or on behalf of a firm against any third party unless the firm is registered, and the persons suing are or have been shown in the Register of Firms as partners in the firm.

No power to suit to enforce a right arising from a contract shall be instituted, by or on behalf of a firm against any third party unless the firm is registered, and the persons suing are or have been shown in the Register of Firms as partners in the firm.

Power to suit by a partner against the firm or other Co-partners

Power to suit to enforce a right arising from a contract or conferred by this Act, by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm.

No power to suit to enforce a right arising from a contract or conferred by this Act, by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm.

Ability to claim set off

The registered Partnership Firm enables the partners with power to claim set-off. When any third-party files a suit against the Partnership Firm, the Partnership Firm can claim the set-off, if any against the claim of third Party. 

The power to claim set off against the third party is available only when the firm is registered under The Partnership Act 1932.

Conversion into LLP & Private company

Registered partnership firms can easily convert into LLP & Private company.

Unregistered partnership firms first registered himself and then convert into LLP or Private company.

Benefits under Income Tax Act

The Registered firms is entitled to claim tax benefit under the provision of Income Tax Act.

The Unregistered firms cannot claim tax benefit under the provision of Income Tax Act.

Registered partnership firms have more benefits as compared to non-registered partnership firms.




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