Definitions under section 4 of the Partnership Act, 1932:
“It is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”
“Persons who have entered into partnership with one another are called individually Partners.”
“When the persons who have entered into partnership with one another individual partners then this partnership collectively called firm”
For the constitution of Partnership firm the following:
- Lawful objective
- Mutual Partnership Agreement
- Business must be carried out by all or any of the partners.
Application for Registration: (Section 58 of the Partnership Act, 1932)
- The registration of a firm may be affected at any time by sending by post or delivering to the Registrar of area in which any place of business of the firm is situated or proposed to be situated, a statement in the prescribed form and accompanied by the prescribed fee, stating…
- The firm name,
- The place or principal place of business of the firm,
- The names of any other places where the firm carries on business,
- The date when each partner joined the firm,
- The names in full and permanent addresses of the partners, and
- Duration of the firm.
The statement shall be signed by all the partners, or by their agents specially authorized in this behalf.
Documents Required for the Registration of Firm:
- Original Partnership deed verified by the Notary-Public with a photocopy. (Incomplete Partnership deed is not acceptable)
- Copies of the CNICs of all the Partners. (Verified by the Notary-Public)
- Original Bank Challan of Rs. 100/- paid on Form 32-A, in National Bank of Pakistan.
- Application for registration on Form-1, signed by the partners and verified by the witnesses.
Note: For the e-registration of the firm “Partnership Firm IT Form” is required.
Documents required for changes/amendment in the Firm: (if any)
- Original amended Partnership deed verified by the Notary-Public with a photocopy.
- For addition of new partner copy of the CNIC verified by the Notary-Public.
- In case of Addition/Deletion of Partner the entire existing partner’s must come to the concerned office along with their original CNICs and verify the changing.
- Copy of the Proclamation for Addition/Deletion of partner(s).
- Application form like Form-II or Form V or both according to rule (According to required changes), with Changes fee original bank challan paid on Form 32-A, in National Bank Of Pakistan.
Note: Names that are not allowed for firms:
Pakistan, Quaid-e-Azam, Jinnah, National, New, United Nation, Co or Company, Govt., Provincial Govt., Group, Abbreviations like WHO, ILO etc…
Effect of Non-Registration: (Section 69 of the Partnership Act, 1932)
- No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or have been shown in the Register of Firms as a partner in the firm.
- No suit to enforce a right arising from a contract shall be instituted in any Court 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 Firm as Partners in the firm.
- The provision of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect:-
- The enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realize the property of a dissolved firm, or
- The powers of an official assignee, receiver or Court under the Insolvency (Karachi Division) Act, 1909, or the Provincial Insolvency Act, 1920, to realize the property of an insolvent partner.
- This section shall not apply—
- To firms or to partners in firms which have no place of business in Pakistan, or whose places of business in Pakistan are situated in areas to which by notification under Section 56, this Chapter does not apply, or
- To any suit or claim of set-off not exceeding one hundred rupees in value which is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887, or to any proceedings in execution or other proceeding incidental to or arising from any such suit or claim.
Penalty for furnishing false particulars: (Section 70 of the Partnership Act, 1932)
Any person who signs any statement, amending statement, notice or intimation under this Chapter containing any particular which he knows to be false or does not believe to be true, or containing particulars which he knows to be incomplete or does not believe to be complete, shall be punishable with imprisonment which may extend to three months or with fine, or with both.
Liability of a partner for acts of the firm: (Section 25 of the Partnership Act, 1932)
Every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner.
Liability of the firm for wrongful acts of a partner: (Section 26 of the Partnership Act, 1932)
Where, by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the firm is liable there for to the same extent as the partner.
Liability of firm for misapplication by partner: (Section 27 of the Partnership Act, 1932)
- A partner acting within his apparent authority receives money or property from a third party and misapplies it, or
- A firm in the course of its business receive money or property from a third party, and the money or property is misapplied by any of the partners while it is in the custody of the firms,
The firm is liable to make good the loss.