Firm registration is at the sole discretion of the concerned firm. As per the Partnership Act of 1932 it is not absolutely mandatory for a firm to get registered with the Registrar of Partnership Firms. If the partners of a firm are willing then they can get their firm registered. However a registered firm can enjoy a lot of benefits and are at an advantage in comparison to an unregistered firm. When it comes to paying income tax, it is the partners who are taxed individually. Therefore they can enjoy lower assessment. In terms of legal benefit, a registered firm can file law suits against other firms/companies as well as its partner/partners. There are also benefits for retired partner/partners, new partner/partners and creditors. An unregistered firm does not get these advantages and the same is mentioned clearly in the Section 69 of the Partnership Act.
How to Register a Partnership firm
If you are a partner of a firm and would like to register it then you have to file a statement on a prescribed form. You also have to deposit a registration fee. The process of registration of firm includes submission of statement followed by certification. All the partners should sign on the statement that contains the complete details of the firm (name, location and branches etc). After submission of the statement, the same is examined by the Registrar. If everything is in order and the Registrar is satisfied with the particular given in the statement then a certificate of registration is issued by the Registrar. For any changes or correction of mistakes, the partners will have to notify the Registrar and the Registrar will do the needful accordingly.