Directors & Firm

This query is : Resolved

CA. Jyoti Baid (Querist)
Follow

09 February 2010 Respected All,

XYZ PVT LTD is a company with directors X,Y and Z.
The directors decide to form a partnership firm in which X,Y,Z, XYZ PVT LTD and SKK PVT LTD will be partners.
The capital contribution by the partners is:
X - 5%
Y - 5%
Z - 5%
XYZ P LTD- 45%
SKK P LTD- 40%
The profit sharing ratio will 1/5 th each.

Is there any restriction or compliance regarding the formation of firm?

Regards
Jyoti

M Prabhakar Menon

M Prabhakar Menon (Expert)
Follow

10 February 2010 There is no restriction under the Indian Partnership Act Please examine the Articles of Association of the companies involved for any restrictions imposed in which case u will have to amend the Articles to suit the purpose.

CA. Jyoti Baid

CA. Jyoti Baid (Querist)
Follow

10 February 2010 Thank you for the reply.

What are the compliances in this case as the directors are forming the firm with the company as one of the partners and diverting the funds of the company in the firm.

Chandranil

Chandranil (Expert)
Follow

23 February 2010 as per my knowledge,

first check articles of both the companies whether they allow the company to be member of partnership firm

secondly if your company and such firm is entering into any contract then provisions of section 297,298,300,301,and AS 18 has to be followed, mind well if your company has paid up capital more than 1 Cr then u need to go for central govt approval for such contract

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