Investment in a LLp

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Ram (Querist)
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31 August 2021 There is a offer of 25% stake in a LLP for Rs. 1 cr for a new partner. The present capital is Rs.10.00 lakhs held by 2 techie founders say 50% - 50% . How to take the investment and structure the stake ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 August 2021 Create Goodwill for 2.90 crore by crediting capital account and debiting Goodwill account.
After receipt of 1 crore for 25% stake total capital will be 4 crore. Stake will be proportional now.

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Ram

Ram (Querist)
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31 August 2021 Sir, Thanks your answer was good. Just a Follow up question. (1) Will there be a IT issue on the GW account and the credits to the existing partners. (2) When we convert this LLP into a Ltd for reverse merger in the next few years will this shares have to be declared as Shares issued in consideration other than cash ?. Thanks

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 August 2021 1 No IT issue till capital taken out in excess of investment.
2 yes, you are right.

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Ram

Ram (Querist)
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31 August 2021 thanks for the prompt answer sir