03 February 2013
Respected sir, My client started business from 1st April,2012 under partnership. No Agrreement for partnership prepared or no deed prepared untill now. so kindly tell me whether Partnership Agreement or deed can be prepared after starting business. and also tell me about which amount of stamp paper required for partnership agreement? what is diffrent between deed and agreements?
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.
Agreement and deed term used as same both defined charter of the agreement.
03 February 2013
All the partners are entitled and liable for equal share in profit and loss in absence of any agreement {Mandyala Govindu vs. CIT AIR 1975 SC 2284}.
PROPERTY OF THE FIRM
The property of a Partnership firm will consist of all the assets, movable and immovable brought in by any or all the partners into the firm and also include the goodwill. Section 15 says that subject to the contract between the partners, the property of the firm shall be held and used by the partners exclusively for the purpose of business. Partner cannot transferany part of the property of firm till the continuation of partnership {Addanki Narayanappa vs Bhaskara Krishnappa AIR 1966 SC 1300}. It may be stated that relaying upon the specific provision of Section 22 of the English Partnership Act, 1890, the Supreme Court has held that all the property of a Partnership firm, whether, movable or immovable is movable property, and therefore, on retirement of any partner or dissolution Partnership the division of even immovable property among the partners does not amount to transfer of property and the deed of retirement or dissolution does not require registration.
CAclubindia
