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D. B. Mehta (busisness)     16 July 2009

Transfer of Property Act

Land & Building  introduced in the unregistered partnership firm as capital by a partner and accounted as fixed asset in the book of accounts of the firm under a Partnership deed. The firm claims depreciation on such buildings. Firm possess and accounts the property as an owner for more than 12 years. However the title records continue in the name of the individual partner. How can the Record of rights be transferred in the name of the Partnership Firm. There was no Agreement or sale deed between the partner and the Firm at the time of introdcution of land & building in the Firm. Is a Sale Deed necessary to be executed and Stamp Duty paid.



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 2 Replies

Saket Gandhi (advocate)     21 July 2009

Dear Mr. Mehta,

 

Under the Partnership Act, a partner can bring in the Assets as Capital of the Firm. In return, he may be given Profit as decided under the Partnership.  Thus  an immovable property can be brought in as capital.

Such a property can be brought in by Assigning the rights in the Immovable property by the Partner who wants to bring in the property as capital. Thus a Deed of Assignment can be executed by and between the partner in his individual capacity and the partnership firm.

However, said Deed be compulsorily registered under registration act. Further, the stamp duty on an Assignment would be less than the Sale Deed, subject to variation in each state,

Thus, a deed of assignment be registered instead of sale deed.

I hope, i have made the matter clear....

 

Regards...

D. B. Mehta (busisness)     23 July 2009

thnx, regards


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