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Which of the following is not disability of an unregistered firm?
- a)It cannot file a suit against third parties
- b)Its partners cannot file a suit against a firm.
- c)It cannot claim a set-off exceeding Rs. 100
- d)It cannot be sued by a third party.
Correct answer is option 'D'. Can you explain this answer?
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Which of the following is not disability of an unregistered firm?a)It ...
Because third party can file a case against firm even if it is not registered
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Which of the following is not disability of an unregistered firm?a)It ...
Introduction:
An unregistered firm refers to a partnership firm that is not registered under the Indian Partnership Act, 1932. Such firms do not enjoy certain privileges and benefits that registered firms have. They are subject to certain disabilities, which are limitations or restrictions imposed on them by law.
Disabilities of an unregistered firm:
1. Lack of right to file a suit against third parties: An unregistered firm cannot file a suit to enforce its rights against third parties. This means that if the firm enters into a contract with a third party and the third party breaches the terms of the contract, the unregistered firm cannot approach the court for legal remedies. However, the partners of the unregistered firm can file a suit against a third party.
2. Partners cannot file a suit against the firm: In an unregistered firm, the partners do not have the right to file a suit against the firm or its other partners for any dispute or claim. This limitation restricts the partners from seeking legal recourse for any grievances they may have within the firm.
3. Limitation on claiming a set-off: Set-off refers to the adjustment of mutual debts between a debtor and a creditor to determine the net amount payable. In the case of an unregistered firm, it cannot claim a set-off exceeding Rs. 100. This means that if the firm owes a debt to a third party and the third party also owes a debt to the firm, the firm can only set-off the amounts up to Rs. 100.
4. Cannot be sued by a third party: Unlike a registered firm, an unregistered firm cannot be sued by a third party. This means that if a third party has a dispute or claim against the unregistered firm, they cannot initiate legal proceedings against the firm. However, the partners of the unregistered firm can be sued individually.
Conclusion:
The correct answer is option 'D' - An unregistered firm cannot be sued by a third party. This disability implies that the third party cannot directly initiate legal action against the unregistered firm. However, the partners of the unregistered firm can be held individually liable for any claims or disputes.
An unregistered firm refers to a partnership firm that is not registered under the Indian Partnership Act, 1932. Such firms do not enjoy certain privileges and benefits that registered firms have. They are subject to certain disabilities, which are limitations or restrictions imposed on them by law.
Disabilities of an unregistered firm:
1. Lack of right to file a suit against third parties: An unregistered firm cannot file a suit to enforce its rights against third parties. This means that if the firm enters into a contract with a third party and the third party breaches the terms of the contract, the unregistered firm cannot approach the court for legal remedies. However, the partners of the unregistered firm can file a suit against a third party.
2. Partners cannot file a suit against the firm: In an unregistered firm, the partners do not have the right to file a suit against the firm or its other partners for any dispute or claim. This limitation restricts the partners from seeking legal recourse for any grievances they may have within the firm.
3. Limitation on claiming a set-off: Set-off refers to the adjustment of mutual debts between a debtor and a creditor to determine the net amount payable. In the case of an unregistered firm, it cannot claim a set-off exceeding Rs. 100. This means that if the firm owes a debt to a third party and the third party also owes a debt to the firm, the firm can only set-off the amounts up to Rs. 100.
4. Cannot be sued by a third party: Unlike a registered firm, an unregistered firm cannot be sued by a third party. This means that if a third party has a dispute or claim against the unregistered firm, they cannot initiate legal proceedings against the firm. However, the partners of the unregistered firm can be sued individually.
Conclusion:
The correct answer is option 'D' - An unregistered firm cannot be sued by a third party. This disability implies that the third party cannot directly initiate legal action against the unregistered firm. However, the partners of the unregistered firm can be held individually liable for any claims or disputes.
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Which of the following is not disability of an unregistered firm?a)It cannot file a suit against third partiesb)Its partners cannot file a suit against a firm.c)It cannot claim a set-off exceeding Rs. 100d)It cannot be sued by a third party.Correct answer is option 'D'. Can you explain this answer?
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Which of the following is not disability of an unregistered firm?a)It cannot file a suit against third partiesb)Its partners cannot file a suit against a firm.c)It cannot claim a set-off exceeding Rs. 100d)It cannot be sued by a third party.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following is not disability of an unregistered firm?a)It cannot file a suit against third partiesb)Its partners cannot file a suit against a firm.c)It cannot claim a set-off exceeding Rs. 100d)It cannot be sued by a third party.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is not disability of an unregistered firm?a)It cannot file a suit against third partiesb)Its partners cannot file a suit against a firm.c)It cannot claim a set-off exceeding Rs. 100d)It cannot be sued by a third party.Correct answer is option 'D'. Can you explain this answer?.
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