Creation of Partnership Firm
Querist : Anonymous
Two HUF Can creat 'partnership Firm' as Bussines Auxiliery Service ?
MEANING OF PARTNERSHIP
A Partnership is defined under section 4 of Indian Partnership Act, 1932, as “the relations between persons who have agreed to share profits of the business carried on by all are any of them acting for all”. This Definition gives three minimum requirements to constitute a Partnership, viz:
• There must be an agreement entered into orally or in writing by the persons who desire to form a Partnership,
• The object of the agreement must be to share the profits of business intended to be carried on by the Partnership, and
• The business must be carried on by all the partners or any of them acting for all of them.
• Persons who have entered into partnership with one another are called individually "partner" and collectively "a firm".
• The name under which their business is carried on is called the “firm-name”.
• When duration of partnership is not defined, the partnership is "partnership at will". When persons become partner for a particular venture or for a specified time, it is called a "particular partnership".
Partnership is an association of person carrying business and in law the firm name is compendious method of describing partners {Deoha F Guzdar, Bombay vs. CIT Air 1955 SC. 14}.
TYPES OF PARTNERSHIP
A Partnership can be formed between:
(i) one or more individuals or
(ii) between an individual and a person representing a H.U.F. or
(iii) between an individual and other partner representing his firm, or between Limited Company or a Corporation and an Individual or Partnership firm, or
(iv) between two Partnership firms, or
(v) between a Limited Company or a Corporation and an individual or Partnership firm, or
(vi) between a Partnership firm and H.U.F., or
(vii) between members of HUF in their individual and independent capacity, and
(viii) between a HUF and a member of that HUF independently.
AGREEMENT OF PARTNERSHIP
A Partnership is constructed by an agreement between the partners. The agreement may be in writing or oral. But from the practical point of view and particularly in view of the provisions of other Acts such as the Income Tax as well as Partnership Act an oral Partnership is not practicable, and therefore, a Partnership agreement is necessarily required to be in writing. Therefore, the mere fact that two persons as joint owners either as heirs or legatees are carrying on a business does not necessarily mean that they are partners and it they want to carry on the business in Partnership, then a Partnership agreement in writing becomes necessary.
Regards
Querist : Anonymous
it means Two HUF can also make Partnership Firm, right ?
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