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Sale of Firm

Akshy (student) (67 Points)

25 May 2021

A partnership firm consists of 4 partners. The partners are willing to sell the firm to two people who shall be the new partners in the firm.

Which deed/agreement is to be drafted for this?

The new partners should pay for share in firm to which account - partners saving account or firm?

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7 Replies

Sivaramaraju G (Learner) (2398 Points)
Replied 25 May 2021

New partners should pay amount to firm's account and from firm's account to outgoing partner's savings accounts.

Deed for change in constitution of the firm should be drafted.
like details of incoming and outgoing partners and other conditions should be written.

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CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 25 May 2021

New partnership agreement should be drafted and the existing partnership agreement should be liquidated.

New partners should pay to firms account

Sivaramaraju G (Learner) (2398 Points)
Replied 25 May 2021

Yeah, agreed with sourav

veerendar singh (tax consultant) (3301 Points)
Replied 25 May 2021

A new firm will take over the existing firm by paying the acquisition price directly to partners.
then the pan and gst number of old firm will be surrendered

Akshy (student) (67 Points)
Replied 25 May 2021

Veerendar Ji, I think you went wrong in understanding.

The old partners will leave and new would take over the business in as in basis with all assets and liabilities of the existing firm and continue business operations in the same name