Partnership firms are governed by the Indian Partnership Act, 1932. It is not compulsory to register a partnership firm, but is advisable to register a Partnership firm.

A registered partnership firm has the following rights:
  • A partner can file a suit in any court against the firm or other partners for the enforcement of any right arising from a contract or right conferred by the Partnership Act.
  • A right arising from a contract can be enforced in any Court by or on behalf of your firm against any third party
  • The firm or any of its partners can claim a set off (i.e. mutual adjustment of debts owned by the disputant parties to one another) or other proceedings in a dispute with a third party.

A partnership firm can be registered whether at the time of initial agreement or even at a later stage. Application needs to be filed with the District Registrar of Firms to which business is located.