Legal Status Of Contract Signed On Behalf Of Unregistered Firm

What is the validity of the contract signed on behalf of the firm which was not registered (did not exist) at the time of signing? Is the contract void ab initio and the invalid or the contract remains valid but the entire liability of the performance of the contract remains with the actual person signing off? Further, can someone write in a contract that the “legal name-ABC LLP” of a firm doing business as/doing business with brand name (for eg) BMW Finance advisors (which is very identical to a registered firm BMW financial services)? If BMW (car co.) does not come to know that another firm is using a similar brand name, then are you safe from any lawsuit?

Answer (1)

Sakshi Yadav

  • Sector-1, Noida

No member of an unregistered firm can enforce his rights under the partnership contract against either the firm or any present or past member of it, nor can the firm sue its customers on their contracts. The firm remains liable to be sued by persons outside it, and cannot plead a set-off.

Answered on 13 Jan 2020


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