Physical division of property

Jiten (Querist) 16 December 2014 This query is : Resolved
We have one 800 Feet shop (shop no.6) in the name of our firm in one co-op. soc. in mumbai which was managed by myself and my brother. Now due to a family reason, we have decided for a division of shop. We have applied to society and the shop has physically divided in to two parts by building a wall i.e. shop no.6 and shop no.6A but the owner remains the firm. Two different share certificate has been issued (both in the name of firm).
Two different maintenance bill has been issued by the society, both in the name of firm. Firm is not dissolved. Is this division of property (without change of name of owner) is lawful?

Thanking you.

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ajay sethi (Expert) 17 December 2014
if you dont want to continue as firm dissolve the partnership . since both brothers are partners in firm as on date firm continues to be owner of both the shops

Anirudh (Expert) 17 December 2014
There is nothing unlawful about it. If the firm wants further sub-division of the shops that can also be done by the Society. After all it is the Firm which has applied for such a division and the Society also agreed and divided it. THEREFORE WHAT CAN BE WRONG OR UNLAWFUL ABOUT IT?

Now, as rightly pointed out by Mr. Ajay Sethi, you may be wanting to have each of the shop in the name of each brother. For that to happen, first the partnership has to be dissolved. In the dissolution deed it has to be specifically brought out as to how the properties of the Firm (both immovable and immovable) would be divided between the partners (in this case only you two brothers, I suppose).

Once the partnership firm is dissolved, you have to intimate the Income Tax Authorities about it. You have to suitably intimate the Registrar of Firms.
You have to obtain fresh licences / VAT registration etc.