Can CEO raise an invoice through a partnership firm

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A CEO who is also a partner in a separate partnership firm is asking if they can invoice their private limited company for services instead of taking a salary. While possible, it requires a formal contract between the two companies. Several conditions must be met, including the partnership deed allowing for service provision, partner resolutions, and proper documentation, especially as it involves related parties.

Joseph Martin

Joseph Martin (Querist)

30 November 2022 I am a partner and CEO of a Private limited company and also a partner in a partnership firm. Can I raise an invoice through my partnership firm for services rendered to the Private limited company, instead of recieving a salary from the PRivate Limited company?

Please help and clarify

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

30 November 2022 If the service rendered is in individual capacity, then you cannot; otherwise a contract needed for the services required by company in favor of the firm.

Joseph Martin

Joseph Martin (Querist)

30 November 2022 Thank you Sir. I can have a contract written between the partnership company and the private limited company for the services rendered by me to the private limited company.

Much obliged

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

01 December 2022 Caution.
* The object of the partnership, as per the partnership deed, should have such rendering of service.
* Resolution of partners required permitting you to enter into such service with the Pvt Ltd company.
* You should not be a 'working partner' ,as per the partnership deed, in the partnership firm.
* Written contract , in stamp paper of requisite value, is necessary.
* Being a related party transaction, the Pvt Ltd company need to pass a resolution to approve the service.
* If the services are professional, 'ethics' of the respective profession needs to be checked.

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