Registration of Firms
Section 56. Power to exempt from application of this Chapter.
The State Government has the power to issue a notification in the Official Gazette.
Through such notification, it may declare that the provisions of this Chapter will not apply.
This exclusion can be for:
The entire State, or only a specified part of the State, as mentioned in the notification.
Section 57. Appointment of Registrars.
57(1).
The State Government has the authority to appoint Registrars of Firms under this Act.
It can also decide and specify the geographical areas within which each Registrar will: Exercise their powers, and perform their official duties.
57(2).
Every Registrar of Firms is treated as a public servant under the law.
This status is as defined in section 21 of the Indian Penal Code, 1860.
Section 58. Application for registration.
58(1).
A firm can be registered at any time; registration is not compulsory at the time of formation.
To register, a statement in the prescribed form must be submitted to the Registrar of Firms of the relevant area.
The statement can be: Sent by post, or delivered in person.
The application must be accompanied by the prescribed registration fee.
The statement must contain the required particulars:
(a). The firm name.
(b). The place or principal place of business of the firm.
(c). The names of any other places where the firm carries on business.
(d). The date when each partner joined the firm.
(e). The full names and permanent addresses of the partners.
(f). The duration of the firm.
The statement must be signed by all the partners, or by their specially authorised agents on their behalf.
58(2).
Each person signing the statement shall also verify it in the manner prescribed.
58(3).
A firm name shall not contain any of the following words, namely:
A firm name cannot use words like:
Crown , Emperor , Empress , Empire , Imperial , King , Queen , Royal , or any words that suggest government approval or patronage,
Unless the State Government gives its consent to use such words by a written order.
Section 59. Registration.
If the Registrar is satisfied that all the requirements of section 58 have been properly complied with then:
He will enter the statement in an official register called the Register of Firms, and
He will file and keep the statement on record.
Section 60. Recording of alterations in firm name and principal place of business.
60(1).
If there is any change in the firm name or in the location of the principal place of business of a registered firm,
A statement detailing the alteration must be sent to the Registrar.
The statement must be accompanied by the prescribed fee.
It must also be signed and verified in the same manner as required under section 58.
60(2).
If the Registrar is satisfied that the requirements of sub-section (1) have been properly followed,
He will update (amend) the firm’s entry in the Register of Firms according to the details in the statement, and
He will file this statement together with the firm’s original statement filed under section 59.
Section 61. Noting of closing and opening of branches.
If a registered firm stops carrying on business at any place, or starts carrying on business at a new place (other than its principal place of business) then:
Any partner or authorised agent of the firm may send an intimation to the Registrar.
The Registrar will then record this change in the firm’s entry in the Register of Firms, and
File the intimation along with the firm’s original statement filed under section 59.
Section 62. Noting of changes in names and addresses of partners.
If any partner of a registered firm changes his name or permanent address then:
An intimation of the change may be sent to the Registrar by any partner or authorised agent of the firm.
The Registrar will then handle and record the change in the same manner as provided under section 61.
Section 63. Recording of changes in and dissolution of a firm. Recording of withdrawal of a minor.
63(1).
A change in the constitution of a registered firm may occur due to admission, retirement, or removal of a partner.
In such a case, any of the following persons may give notice to the Registrar:
An incoming partner.
A continuing partner.
An outgoing partner.
The agent of any such partner who is specially authorised for this purpose.
When a registered firm is dissolved, the notice may be given by:
Any person who was a partner immediately before dissolution, or the agent of such partner, if specially authorised.
The notice must clearly specify the date on which:
The change in constitution took place, or the firm was dissolved.
Upon receiving the notice, the Registrar shall:
Record the notice in the relevant entry of the firm in the Register of Firms.
File the notice along with the original statement relating to the firm that was filed under section 59.
63(2).
A minor may be admitted to the benefits of partnership in a firm.
When such minor attains majority, he must choose whether he wants to become a partner or not.
If, at that time, the firm is a registered firm, the following applies.
The minor himself, or his specially authorised agent, may give a notice to the Registrar stating:
That he has become a partner, or that he has chosen not to become a partner.
After receiving this notice, the Registrar shall record it in the Register of Firms and file it with the firm’s original statement.
Section 64. Rectification of mistakes.
64(1).
The Registrar has the power at all times to correct (rectify) any mistake.
This power is used to ensure that the entry in the Register of Firms for any firm matches and conforms to the documents relating to that firm.
64(2).
All the parties who have signed a document relating to a firm may make an application to the Registrar.
The signed document has to be signed with respect to this chapter.
On receiving such an application, the Registrar may correct (rectify) any mistake found:
In the document itself.
In the entry or note made in the Register of Firms based on that document.
Section 65. Amendment of Register by order of Court.
When a court decides a matter relating to a registered firm, then:
The court may direct the Registrar to make necessary changes in the firm’s entry in the Register of Firms.
If those changes are a consequence of the court’s decision. then:
The Registrar is required to carry out the court’s direction and amend the entry accordingly.
Section 66. Inspection of Register and filed documents.
66(1).
The Register of Firms is open for inspection.
Any person can inspect it.
Inspection is allowed on payment of the prescribed fee.
66(2).
All statements, notices, and intimations filed under this Chapter are open to inspection by the public,
This inspection is subject to the prescribed conditions, and on payment of the prescribed inspection fee.
Section 67. Grant of copies.
Any person may apply to the Registrar for a copy of records from the Register of Firms on payment of the prescribed fee,
The Registrar shall provide a certified copy (signed and authenticated by him) of any entry or part of an entry in the Register of Firms.
Section 68. Rules of evidence.
68(1).
Any statement, intimation, or notice that is recorded or noted in the Register of Firms will be treated as conclusive proof of the facts stated in it.
The information will be held to be true against the person who signed it, or against the person on whose behalf it was signed
68(2).
A certified copy of an entry from the Register of Firms can be produced as evidence.
It can be used to prove: That the firm is registered and the contents of any statement, intimation, or notice recorded or noted in the register.
Section 69. Effect of non-registration.
69(1).
If a person who claims to be a partner of a firm and seeks to file a suit in court in order to enforce a right arising from a contract or granted under this Act and:
The suit is against the firm itself or against another partner.
Such a suit is not maintainable unless:
The firm is registered, and the person filing the suit is or has been shown as a partner in the Register of Firms.
69(2).
A firm seeks to file a suit in court and the suit is to enforce a right arising from a contract and the suit is against a third party (not a partner).
In such cases a suit cannot be instituted unless:
The firm is registered, and the persons filing the suit are or have been shown as partners in the Register of Firms.
69(3).
The rules in 69(1) and 69(2) also apply when a person tries to enforce a contractual right through a set-off or any other legal proceeding.
However, these rules do not affect the following:
(a)
The right to file a suit for the dissolution of a firm.
The right to seek accounts of a dissolved firm.
Any right or power to realise the property of a dissolved firm.
(b)
The powers of an official assignee, receiver, or Court are under:
The Presidency-towns Insolvency Act, 1909, or
The Provincial Insolvency Act, 1920, to realise the property of an insolvent partner.
69(4).
This section will not apply in the following situations:
(a)
It does not apply to firms or partners that have no place of business in the territories where this Act applies.
It also does not apply to firms whose places of business are in areas where this Chapter has been made inapplicable by a notification under section 56.
(b)
It does not apply to any suit or claim of set-off where the value is ₹100 or less.
In Presidency-towns, such a suit or claim must also be one not covered under section 19 of the Presidency Small Cause Courts Act, 1882.
Outside Presidency-towns, such a suit or claim must also be one not covered under the Second Schedule to the Provincial Small Cause Courts Act, 1887.
It also does not apply to execution proceedings or any other proceedings that are incidental to or arise from such suits or claims.
Understanding key concepts:
Set Off;
A set-off is a legal claim where the defendant admits that some amount is payable but asks the court to adjust or deduct an amount that the plaintiff also owes them.
Instead of filing a separate case, the defendant uses the set-off to reduce or cancel the claim in the same suit.
Execution Proceedings:
Execution proceedings are the legal steps taken after a court passes a decree to actually enforce it.
For example, attaching property or selling assets to recover the amount awarded by the court.
Incidental Proceedings:
Incidental proceedings are proceedings that are connected to or arise out of the main suit.
They are not independent cases and exist only to support, clarify, or give effect to the main proceeding
Presidency Towns:
Presidency towns were major cities under British rule with special courts and legal systems.
Traditionally, they include: Bombay (Mumbai) , Calcutta (Kolkata) , Madras (Chennai)
Certain procedural laws apply differently inside and outside these cities.
Section 70. Penalty for furnishing false particulars.
If any person signs a statement, amended statement, notice, or intimation under this Chapter, and:
The document contains any information that he knows is false.
Information that he does not believe to be true.
Information that he knows is incomplete.
Information that he does not believe to be complete, then such person commits an offence.
The punishment for such an offence is imprisonment up to 3 months and fine or both.
Section 71. Power to make rules.
71(1).
The State Government has the power to make rules.
These rules are issued by notification in the Official Gazette.
The rules may prescribe the fees payable for:
Documents sent to the Registrar of Firms.
Inspection of documents kept by the Registrar of Firms.
Obtaining copies from the Register of Firms.
However, such fees cannot exceed the maximum limits specified in Schedule I.
71(2).
The State Government may also make rules for the following purposes:
(a). Prescribing the form of the statement submitted under section 58 and the manner in which it must be verified.
(b). Requiring that all statements, intimations, and notices under sections 60, 61, 62, and 63 be submitted in a prescribed form, and specifying those forms.
(c). Prescribing the form of the Register of Firms, the method of making entries, and the procedure for amending entries or adding notes in the register.
(d). Regulating the procedure to be followed by the Registrar when disputes arise.
(e). Regulating how documents received by the Registrar are to be filed and maintained.
(f). Prescribing the conditions under which original documents may be inspected.
(g). Regulating the grant and issue of copies of documents or entries.
(h). Regulating the elimination or disposal of old registers and documents.
(i). Providing for the maintenance and format of an index to the Register of Firms.
(j). Making general rules necessary to carry out the purposes of this Chapter.
71(3).
All rules made under this section must follow the process of previous publication (they must be published in advance before being finalized).
71(4).
Every rule made by the State Government must, as soon as possible after it is made, be placed before the State Legislature.
Section 72. Mode of giving public notice.
A public notice under this Act is given where:
(a).
When the matter relates to any of the following events in a registered firm:
The retirement of a partner.
The expulsion of a partner.
The dissolution of the firm.
The decision of a person (who was admitted as a minor), on attaining majority, to become or not to become a partner.
In the above cases the public notice must be given in all of the following ways:
By giving notice to the Registrar of Firms under section 63.
By publishing the notice in the Official Gazette.
By publishing the notice in at least one vernacular newspaper circulating in the district where the firm has its place or principal place of business.
(b).
In all other cases the public notice must be given by:
Publication in the Official Gazette.
Publication in at least one vernacular newspaper circulating in the district where the firm has its place or principal place of business.
Section 73. [Repealed.].
Section 74. Savings.
This Act, and any law that it repeals, operates prospectively and does not interfere with events, rights, or obligations that arose in the past.
The Act preserves past rights, responsibilities, legal proceedings, and compatible laws, and applies only to future matters.
In particular, it does not affect:
(a). Any right, title, interest, obligation, or liability that was already acquired or incurred before this Act came into force.
(b). Any legal proceeding or legal remedy relating to such existing rights, obligations, or liabilities, or to anything done or suffered before the Act commenced.
(c). Anything done or suffered before the commencement of this Act.
(d). Any law relating to partnership that has not been expressly repealed by this Act.
(e). Any insolvency law or rule that applies to partnerships.
(f). Any rule of law that is not inconsistent with the provisions of this Act.
