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TREATMENT-PARTNERSHIP

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This query is : Resolved

MONIK K JATANIYA (Querist)
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08 December 2009 EXPLAIN THE TREATMENT, WHEN OUT OF TWO PARTNER ONE DIED, THEN THE REMAINING CAN CONTINUE WITH SAME SET OF BOOKS OF ACCOUNTS OR NOT AS PER PROVISIONS OF PARTNERSHIP ACT,1932

WHAT WILL BE THE EFFECT OF BOTH THE CASES

AND

IS THERE ANY DIFF ON PROFIT WITH BOTH THE SYSTEM.

WHAT INCOME TAX ACT,1961 SAYS REGARDING THAT.

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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08 December 2009 The moment out of two partners one died; the firm is dissolved.

The books of account are required to be closed.

Even if all the assets and liabilities are taken over by the surviving partner; then also he has to close the books of the firm and open new books of account as his proprietory firm.

After expiry of the partner; the bank account has to be closed. The partnership account cannot be run.

There is no facility given in the Banking Act that erstwhile partnership firm can be converted into proprietory concern of the surviving partner.

Hence surviving partner has to open a proprietory concern.

CA Surendra Rakhecha
Surat

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