My query is regarding a partnership firm engaged in MANUFACTURING ACTIVITY having two partners. The Facts are as under:
Now one of the partner "B" wants to discontinue this partnership. Hence the other partner "A" has agreed to this and wants to continue this business under the same name and wants to admit two new partners and retire partner "B" by paying a lump sum amount for his capital and goodwill.
My query is :
1) From Accounting Point of view: What shall be the accounting effects of the above? How will the lump sum payment to partner " b" booked in the accounts books and how will the new capital introduced by the new partners shown in the books?
2) From Law point of view:
What happens to the existing : a) Excise Registration? b) Vat Registration? c) Sales Tax Regstration? d) Pan of the firm? e) Import Export Licence?
Is new registration required for the above or what have to be done to intimate the respective authorities to intimate the change in constitution of the firm?
1)from accounting point of view: first a revaluation account has to be prepared and the profit/loss arising out of it has to be has to be transfered to partners capital account in old profit sharing ratio. i assuming it as profit, it should be recorded in the credit side of the partners capital account along with any reserves and JLP recieved. all amount payable to the retiring partner should be debited to partners capital account.the fresh capital received from new partners shuld be credited to new partners capital account.and until the payment of the capital hasent been made to the retiring partner, it should be taken on the liability side of balance sheet as "B" loan A/c.
2)no there is no need for fresh registration as the firm is operating under the same name.
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