Who is Eligible for Partnership Formation?

•   Individual: Any person who is not a minor, is of sound mind, not an undercharged insolvent and not disqualified from entering into a contract by law can be a partner in a partnership firm.

•   Firm: A registered partnership firm can become a partner of another (partnership) firm, unless stated otherwise in their contract.

•   Hindu Undivided Family (HUF): The Karta of the HUF can enter into a partnership with a firm.

•   Company: A company can also be a partner in a partnership firm unless the company objects.

•   Trustees: Trustees of religious, family trusts etc can also be partners in a partnership firm.

What are the advantages of Registering Partnership?

•   Partners agree on a said profit & loss ratio as discussed and the same being mentioned in the partnership agreement leaves no chance of deception or cause of conflict between the partners.
•   Partner can take legal actions against any partner or the firm to enforce their contractual rights against the partner or firm. Whereas, an unregistered partnership firm cannot be sued by a partner or other partner to claim their contractual rights.
•   Only registered firms enjoy the benefit to claim setoffs against the debts of its creditors.
•   Firms registered under the Indian Partnership Act, 1932 can get into contracts in the firm’s name and can also buy and sell properties in their own name.
•   Registered firms can recover the full amount of debts.
•   Registered firms can enter into contracts in their own name (company’s name).