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Can huf become a partner in partnership firm

Drona (Professional - IT) (71 Points)

14 July 2012

Can HUF become a partner in a partnership firm via its karta?

The firm has other individual partners also who are not HUF.

Drona

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11 Replies

Ajay Solanki (Article) (21 Points)
Replied 14 July 2012

Yes HUF can definately become partner in partner in partnership firm as HUF seperate entity in the eyes of law.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 14 July 2012

Karta of the HUF can become the partner but not the HUF because only karta has legal entity not the HUF...

Charu Srivastava (Company Secretary) (4210 Points)
Replied 14 July 2012

Agree with Ankur,

Karta of HUF can become the partner not HUF

Drona (Professional - IT) (71 Points)
Replied 16 July 2012

So when profits are distributed, will they go to HUF or they need to be filed in Karta's personal income?

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 16 July 2012

In the eyes of Income Tax Act, HUF is a person so the income of dividend is to be taxed in HUF.

amolw (Manager) (21 Points)
Replied 05 September 2012

AS per Superem Court Judgment individual person can be partner of partnership firm and Karta can not be partner, refer Rasiklal Mehta case.

Aditya Soni (CS Final Student Trainee) (727 Points)
Replied 05 September 2012

Originally posted by : amolw
	AS per Superem Court Judgment individual person can be partner of partnership firm and Karta can not be partner, refer Rasiklal Mehta case.

As it is said, Karta is an individual person, hence he can be a partner in a partnership firm but not by the name of that HUF firm.

Drona (Professional - IT) (71 Points)
Replied 12 September 2012

Still not clear : Please choose

1) HUF Can become partner via Karta as Individual, with initial funding from HUF Account - and HUF with its own PAN card will file return for HUF for income received (dividend/profit share)

2) HUF Can become partner via Karta as Individual, with initial funding from HUF Account - and Karta - a person with his personal PAN Card will have to club this income in his individual return and not HUF.

3) HUF Can become partner as HUF(entity) with initial funding from HUF Account - and HUF with its own PAN card will file return for HUF for income received (dividend/profit share)

4) HUF cannot become partner as HUF(entity) with initial funding from HUF Account