jagadeesan (managing director) 13 January 2011

partner ship firm

A company is running with two partners. One of the partner wishes to leave the company. In his place a new partner is to be taken. The company had acquired landed property and the stamp duty for purchasing the property. had come to nearly 50 thousand. The out going partner is paid his share. total asset of the firm is 6 crores.The incoming partner takes the half share.

What are the legal procedure and implications.?

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3 Replies

A V Vishal (Advocate) 13 January 2011

What do you mean a company having two partners, is it a company with two directors or a partnership with two partners, in the former there is no share in the assets of the company, he takes back only the shares bought by him in the company. In the latter case the assets are revalued and shared as per the P/L sharing rato mentioned in the partnership deed either in cash or kind.

N.V.shravan kumar (lawyer) 16 January 2011

Always remeber that a partnership firm is an association of persons. It is not to be termed as Company.

As regards your query ,it is induction of a new partner. In case there are only two partners,the minute one partner retires ,the partnership comes to an end .

In this situation i advise that a new partner may be inducted into the partnership business and later after settling the accounts ,the intending partner may retire from partnership after accepting his share of profit ,if any.

Also remeber that in case of any loss as on the date of his retirement,the outgoing partner has to pay his share of loss to the firm.

As regards the property if the said property is firms paroperty, the outgoing partner has to be given his share of investment as per the market reate prevalent on the said property.

For any further assistance ,you may contact me on the following e-mail : madhurim2@yahoo.com

N.V.SHRAVAN KUMAR

ADVOCATE,

A.P HIGH COURT