Formation of Proprietary Firm
This query is : Resolved
01 October 2008
can a private limited company form proprietary firm?
01 October 2008
A company, just as a legal person is already a proprietor of the business it is running.
01 October 2008
But it is coming under the purview of Company. Can a company form a proprietorship firm or can it became proprietor of firm? please explain
01 October 2008
Mr.Srinivasaraghavan had explained in simple & easy to understand terms.
The thought that may be lingering in your mind may be…. A company is also like a person and so why it cannot form a proprietory concern.
Let me try to explain..
Incorporated companies are recognized as separate legal entities by law. These are formed by association of two or more human beings with certain objectives. That is why law requires the people who promotes them to prepare and verify memorandum of association & articles of association.
When a business is done by a single human being, we call it as sole proprietorship concern. Thus there is a business & ownership.
If the ownership is by two or more persons with joint and several liability then we call it as a partnership firm.
Law also allows ownership by two or more persons with limited liability, which we call as limited companies.
From the above it can be seen that there different form of owners to business.
Your query is something similar to “whether we can call one type of owner as the other type..?” which cannot be.
If a limited company wants to do business other than those in the main objective, it can amend the objective clause or form a subsidiary or enter into a joint venture.
Hope this throws some light
cheers
The thought that may be lingering in your mind may be…. A company is also like a person and so why it cannot form a proprietory concern.
Let me try to explain..
Incorporated companies are recognized as separate legal entities by law. These are formed by association of two or more human beings with certain objectives. That is why law requires the people who promotes them to prepare and verify memorandum of association & articles of association.
When a business is done by a single human being, we call it as sole proprietorship concern. Thus there is a business & ownership.
If the ownership is by two or more persons with joint and several liability then we call it as a partnership firm.
Law also allows ownership by two or more persons with limited liability, which we call as limited companies.
From the above it can be seen that there different form of owners to business.
Your query is something similar to “whether we can call one type of owner as the other type..?” which cannot be.
If a limited company wants to do business other than those in the main objective, it can amend the objective clause or form a subsidiary or enter into a joint venture.
Hope this throws some light
cheers
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GSTR-1A How to update Invoice
- Excess salary payment.
- Stamp Paper for partnership firm change new income tax 2025
- Capital gain from sale of house property
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- TDS on Purchase of Immovable Property by NRI from NRI
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- Regarding TDS Applicability For Director Remuneration
- Value of property in capital gain
- FORM 26A APPLICABILITY
- Copyright software
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
