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M.Sriram Shenoy
(Querist)
28 January 2008
Can a Company be a partner in a partnership firm? If possible, how can the creditors of the partnership firm proceed against the company for recovery od their dues incase of dissolution of the firm? If the company is held liable, from what source will the company pay off the firm's creditors and what will be the impact on the company's own creditors and shareholders?
S.Srinivasaraghavan
(Expert)
28 January 2008
A company can be a partner in partnership firm. As far the liability of partnership firm the company will be lible for the liability of the partnership firm, as in the case of any other partner. Company will have to pay of the liabilty out of its assets. To that extent the company's creditors may suffer, if the company's assets are not sufficient. But again secured creditors will have priority. As far as the shareholders of th company is concerned they are not liable for the creditors, if the shares are fully paid up. If the shares are partly paid up, they are liable to the extent of unpaid amount of shares.
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