Multiple choice

Which of the following is not a disability of an unregistered firm?

  1. It cannot file a suit against third parties

  2. Its partners cannot file a suit against a firm

  3. It can claim a set-off exceeding Rs. 100

  4. It can be sued by a third party
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

An unregistered firm faces three disabilities under Section 69 of the Partnership Act: (1) it cannot file a suit against third parties, (2) a partner cannot file a suit against the firm or other partners, and (3) it cannot claim a set-off exceeding Rs. 100. However, third parties CAN sue an unregistered firm - this is NOT a disability but a right of others. The firm remains vulnerable to lawsuits despite being unregistered.

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