Criminal Trident Pack: IPC, CrPC and IEA by Sr. Adv. G.S Shukla and Adv. Raghav Arora
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Manasi (Owner)     05 January 2011

Partnership liability of sleeping partner (Urgent)

Hi All, This is my first post. I have a proposal from two of my colleagues to start a partnership company. I have to provide my residence as the address for the consultancy company. I want to limit my liability so can I become a sleeping partner? What is the liability of the sleeping partner? I would like to become full fledged partner once it becomes a private limited company after we get the initial money to start the private limited company. Can I provide my residence as the address of the company without becoming a partner? Thank you very much for your help. Regards, Manasi


Learning

 11 Replies

nishad (Asst.Manager Legal)     05 January 2011

Partners are jointly and sevearly liable.It does not make a difference whether u r sleeping ,dormat or active....

1 Like

M. A. Khan (advocate)     05 January 2011

you can give address of ur residence in ur partnership deed, that will become registered address of ur business.  under section 11 of act, ur rights and liability can be determine by a contract amoung partners.

1 Like

Asha Pole (Legal)     05 January 2011

once your partnership is converted in to private ltd, then you will either be a member/shareholder by purchasing the shares of the company or you can opt to become a director with the consent but you can term yourself as a full fledged partner

Asha Pole (Legal)     05 January 2011

* but you cannot term yourself as a partner on its conversion

1 Like

Manasi (Owner)     06 January 2011

Hi All,

Thank you very much for the immediate replies. Can I go for the Limited Liability Partnership?

 

nishad (Asst.Manager Legal)     06 January 2011

u may explore that option wherein u can get ur liabilities limited.LLP is a hybrid of both Partnership and Company and it may just work well for you..

N.K.Assumi (Advocate)     07 January 2011

I like the posting of Nishad " whether you are sleeping, dormant or active"

sc lodha (propritor)     20 March 2015

Sir am a CA , Chartered Accountant, and presently am ill, and going for treatement of critical illness.

I dont have any Income for survival. Being a CA, am sujjested by friends , to Join as Sleeping Partner of any CA Firm, where by I need to apply for Copy of Practice From ICAI, and then keep my certiificate with the CA firm and need to join as sleeping Partner through Sleeping Partnership DEED,

I am said to be Paid 5000/ Rs.

Purely for rs 5000/ i like to join as sleeping partner.

 

SIR I REQUEST TO KNOW , WHAT WILL MY LIABILITY BE,

IN CASE ANY WRONG IS DONE, IS I RESPONSIBLE ?

DO GUIDE ME PLEASE.

I AM NOT TO WORK IN ANY WAY FOR THE FIRM,

PRESENTLY AM REGISTERD MEMBER of ICAI.

REGARDS.

SC JAIN.

HYDERABAD.

20/03/15.

Adv S K Gupta (Advocate High Court)     03 April 2015

For Manasi

What is your main aim "to rent your house or to become a Partner"

Renting of house with out big liability is possible but once you are partner in a business you have to own all the liabilities for the act done by any of your partner so take care.

 

For Mr SC Jain

You dont have much risk if you working with a reputed company, however entire risk will depend on the content of your partnership.

N R Dash.. (Advocate)     04 April 2015

Why you want to be a partner. Just execute a lease deed of the premises for which you can earn & also will have the termination clauses for your safety.

 

If you wish to establish your own firm, go for LLP as it is easy to form & is a hybrid of partnership & pvt ltd co. But be sure, compliances to be ensured each financial ear to keep it running & out of legal trouble.

Devaraj Krishna (Legal Practitioner)     04 April 2015

A sleeping partner is a partner who ‘sleeps’, that is, he does not take active part in the management of the business. Such a partner only contributes to the share capital of the firm, is bound by the activities of other partners, and shares the profits and losses of the business. A sleeping partner, unlike an active partner, is not required to give a public notice of his retirement. As such, he will not be liable to third parties for the acts done after his retirement.

As per the Section10 of the indian partnership act 1932  DUTY TO INDEMNIFY FOR LOSS CAUSED BY FRAUD. Every partner shall indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm


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