One of my client is a partner of a firm which is engaged in dealing with paint products. Now he is looking forward to invest in quarry business where he will hold 10% share for 20 lakhs rupees.
Now he is in requirement of money for the same. Can he withdraw money from his existing firm. If yes what is accounting and tax impact?? The existing firm is having a cash balance of 27 laks
2 Replies
rama krishnan
(12239 Points)
Replied 01 January 2019
yes he can withdraw. there's no restrictions for withdrawal form his capital or current account of the firm
PARVEEN DAHIYA
(181 Points)
Replied 01 January 2019
yes he can withdraw money from firm and it will show as drawing bcz he is investing personally. so if will withdraw money then it is treated as drawing by partner and firm can charge interest on drawing ( if deed allow)
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