Questions re property owned by partnership

Querist : Anonymous (Querist) 02 January 2012 This query is : Resolved
I am part of a 2-person partnership in Tamil Nadu, and unfortunately have been diagnosed with a life-threatening illness with a prognosis that is not very encouraging. The other partner is my brother. The partnership does not do any trade, and simply owns one immovable property that is leased currently for several years.

I have a few related questions:

a. By definition I understand that a partnership requires at least two people. Upon death of one of the two partners, does the partnership automatically dissolve. Or does it automatically become a sole proprietorship that is run by the surviving partner?

b. If the partnership is automatically dissolved, I would assume that the ownership of the immovable property (currently owned by the partnership) would flow to the surviving partner and the successor of the deceased partner. Is this true, and is there any IT tax consequence or other related stamp duties or fees?

c. Assuming that the property ownership flows as mentioned above, can I settle my interest to my wife and son? What about IT tax, stamp duty or fees for such settlement?

d. What would happen to the multi-year lease that is currently between the tenant and the partnership? Would this remain in tact if the partnership is dissolved, or would it be better to memorialize any related transition with the tenant?

I would greatly appreciate any input as I do not know Indian law and want to do things proactively while we still have the time.

Best Regards,
Chetan

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Devajyoti Barman (Expert) 02 January 2012
1. No, it would automatically get dissolved.
2.Yes
3.Yes you could execute a Will in this regard.
4.It would remain intact though the individual owners now need to inform the lessee about the change in ownership.

Prakash Yedhula (Expert) 02 January 2012
All your queries depend on the terms of the Partnership deed. A proper opinion can be rendered only on perusing the partnership deed.

Querist : Anonymous (Querist) 03 January 2012
Dear Mr. Barman and Mr. Yedhula,

Thanks for your responses. I was wondering if there is any tax consequence in items (b) and (c) above?

Could I upload the partnership deed (removing the details of the firm and the partners)?

Thanks very much for your time!

Best Regards,
Chetan

Devajyoti Barman (Expert) 03 January 2012
For that you need to consult Tax Consultants. The advocates in general do not look after Tax matters.

prabhakar singh (Expert) 03 January 2012
Did not you have any tax consultant so far.

Querist : Anonymous (Querist) 03 January 2012
Thanks for your responses.

I have never had a need for a tax consultant before, and would appreciate any referrals or suggestions on how I can find a good one.

Thank you,
Chetan