February 04 2006
The Government should come out with an amnesty scheme for all defaults in registration of partnership firms with Registrar of Firms.
Why an amnesty?
Under the Indian Partnership Act, 1932 (as is applicable in Maharashtra and consequently in Mumbai) registration of a partnership firm with Registrar of Firms (ROF) is compulsory. There are very drastic effects of non-registration. For example, if a partnership firm is not registered, it cannot file a suit against any one!
Additionally, almost every change in information submitted to the ROF must also be registered. For example, if a new partner is admitted or a partner retires or a partner changes his residence, ROF must be informed within a prescribed time. There are monetary penalties for delay in submitting initial application of registration and also for delay in submitting any other information later on.
There are plenty of firms who have not been able to comply with their obligations. This may be due to ignorance, inability or unwillingness of partners.
Who benefits out of this?
Its a win-win situation for both the partners/firms and the government!
Its beneficial to partners/firms because it will help them sort out their registration mess. It will give them an opportunity to save themselves from drastic consequences for small defaults.
Its beneficial to government because it will generate additional revenue as fees! There are people who are not coming forward because of penalty, but they will see this as an opportunity and willingly pay some fees. Additionally, it will also help in updating the records of Registrar of firms. If the records are not proper, they are somewhat useless!
Will the government ever wake up to this need?