Shares

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Querist : Anonymous

Querist : Anonymous (Querist)

27 January 2010 Mr A and Mr. B are directors of ABC pvt Ltd.
They both also have a partnership firm m/s Xyz.

They have purchased shares in ABC pvt Ltd on behalf of their partnership firm.

Now the question is that, in whose shareholding, the partnership shares be included.

Please help..

CA Amit Kumar Hallen

CA Amit Kumar Hallen (Expert)
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27 January 2010 The shares will be in the name of the partnership firm and not partners. The Firm has separate identity other than the partners and hence the shares will be in the name of firm.

Ankur Garg

Ankur Garg (Expert)
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27 January 2010 You are saying that partner purchased shares in the name of firm which is incorrect. A firm can not be a member of a company.

So shares purchased by the partners is their personal property and not the property of firm.

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Querist : Anonymous

Querist : Anonymous (Querist)

27 January 2010 But as per me partnership firm cannot become a member of the company. Also the same is as per clarification given by the department.The Department of Company Affairs has in its Circular No. 4/72, dated 9-3-1972 expressed similar view stating that a firm, not being a person, cannot be registered as a member of a company except where the company is licensed under section 25. In another Circular No. 5/75 (8/18/75-CL-V), dated 31-3-1975 issued under section 187C of the Act the Department has expressed similar view.

Querist : Anonymous

Querist : Anonymous (Querist)

27 January 2010 Ankur sir, the shares were purchased in the joint name of both the partners. And the firm was the beneficial owner

Ankur Garg

Ankur Garg (Expert)
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27 January 2010 Simply name of partner should be entered in the register of member of the co. as a member in their individual capacity.

Querist : Anonymous

Querist : Anonymous (Querist)

29 January 2010 Sir but the payment for the shares came from the bank account of the Partnership firm..