Can two partnership firms form a new firm ?
This query is : Resolved
28 May 2013
Hello everyone,
suppose AB & CO, CD & CO are two partnership firms.
Now they both want to form a partnership firm to carry a particualr business.
can they form a partnership firm and if yes then can the partners of both the firms (are working partners) can claim the remuneration as per section 40(b) ?
suppose AB & CO, CD & CO are two partnership firms.
Now they both want to form a partnership firm to carry a particualr business.
can they form a partnership firm and if yes then can the partners of both the firms (are working partners) can claim the remuneration as per section 40(b) ?
29 May 2013
Yes two firms can form new firm as partnership is between 2 or more persons and not Individuals. But from new firm partners of old firm can not claim remuneration as remuneration is allowed to working partner. A firm being an unnatural person can not be a working partner. hence no remuneration allowed.
Hence it is advised that partners of old firms becomes partners in new firm rather making their respective as partner.
Hence it is advised that partners of old firms becomes partners in new firm rather making their respective as partner.
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