Can a partnership firm become partner in another firm ?

This query is : Resolved

Vinod (Querist)
Follow

05 January 2012 Dear Sir,

Can a partnership firm be registered with another firm as one of the partner ?

In other words, whether a partnership firm can become a partner in another partnership firm ?

Please advise...

hanish

hanish (Expert)
Follow

16 January 2012 A partnership firm does not have a seperate legal identity. It cannot become partner is another partnership firm

CS ( Dr.) Rajeev Babel

CS ( Dr.) Rajeev Babel (Expert)
Follow

01 April 2015 Kindly refer to section 4 of the Partnership Act 1932 which provides that Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. The term person' as used in Section 4 does not include a firm. This is because a firm is not a separate legal entity. Hence two partnership firms cannot enter into partnership, though all the partner of the two firms may form a new partnership out of their separate firms provided their number does not exceeds the mandatory number. ( Case law: Duli Chand etc. Comm. of Income Tax, AIR (1956) Sc, 354)

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok