Could someone guide me as to whether a Partnership can be entered say on 1.1.2013 wherein the partners mutually agree to take over a running business of sole proprietorship of one of the partner's at a future date, say from 1.4.2013.
5 Replies
Roshan Thomas
(C.E.O )
(356 Points)
Replied 30 January 2013
Yes of course,
There is no restriction in forming a partnership firm to take over a sole proprietory business. I would suggest entering into a separate sale agreement with the partner intending to sell his business after formation of the partnership.
Naresh Kotwani
(Chartered Accountant)
(40 Points)
Replied 30 January 2013
Thanks Mr. Roshan. But I think in case of entering into a separate agreement of sale of sole proprietorship business to the partnership firm it would attract capital gains tax. My specific query is as to whether the said partnership entered into on 1.1.2013 can take over the running business of the sole proprietor, who happens to be one of the partner in the firm, at a future date say 1.04.2013.
Roshan Thomas
(C.E.O )
(356 Points)
Replied 30 January 2013
I do not understand the difference between entering into a separate sale agreement of proprietory firm and take over of business. In my understanding both situations attract capital gain tax.
Naresh Kotwani
(Chartered Accountant)
(40 Points)
Replied 30 January 2013
Thanks once again Mr. Roshan. But my specific query is as to whether the said partnership entered into on 1.1.2013 can take over the running business of the sole proprietor, who happens to be one of the partner in the firm, at a future date say 1.04.2013. More specifically whether in the partnership deed dated 1.1.2013 the said partners can agree to take over the sole proprietorship business of one of the partners w.e.f. 1.4.2013.
My specific query is as to whether the said partnership entered into on 1.1.2013 can take over the running business of the sole proprietor, who happens to be one of the partner in the firm, at a future date say 1.04.2013.
Read more at: /forum/deed-of-partnership-drafting-236975.asp#.UQkIV2efY-p
Read more at: /forum/deed-of-partnership-drafting-236975.asp#.UQkIV2efY-p
My specific query is as to whether the said partnership entered into on 1.1.2013 can take over the running business of the sole proprietor, who happens to be one of the partner in the firm, at a future date say 1.04.2013.
Read more at: /forum/deed-of-partnership-drafting-236975.asp#.UQkIV2efY-p
Read more at: /forum/deed-of-partnership-drafting-236975.asp#.UQkIV2efY-p
My specific query is as to whether the said partnership entered into on 1.1.2013 can take over the running business of the sole proprietor, who happens to be one of the partner in the firm, at a future date say 1.04.2013.
Read more at: /forum/deed-of-partnership-drafting-236975.asp#.UQkIV2efY-p
Read more at: /forum/deed-of-partnership-drafting-236975.asp#.UQkIV2efY-p
Roshan Thomas
(C.E.O )
(356 Points)
Replied 30 January 2013
If you meant to include a specific clause in the partnership deed that it will take over the business of one of the partners - there is no problem in including such terms.
If you plan to form a partnership to take over the business then may i suggest forming an LLP, In which casethere are tax benefits subject to fulfilment of certain conditions.
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