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Ammendment in Partnership On Death of Partner and Introduction of New Partner

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shubham jindal

21 Points Posted on 28 November 2024

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Ammendment Deed in Partnership On Death of Partner and Introduction of New Partner

case - in existing partnership father and one son are partners , now father is expired and second son wants to become partner (legal hiers of deceased are wife and two sons)

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Quick Summary

This discussion addresses how to amend a partnership deed following the death of a partner and the introduction of a new partner. It covers the legal implications, such as firm dissolution unless the deed allows continuation, and the process of executing a supplementary deed to record the changes. Key steps include settling the deceased partner's capital, admitting the new partner, and updating relevant authorities like the Registrar of Firms, PAN, bank, and GST.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 28 November 2024

Refer:: https://www.caclubindia.com/forum/partnership-deed-230600.asp

Aashok Kumar Sharma

Finance/Compliance Consultant

75870 Points Posted on 08 November 2026

Partner's death and a new partner:
• Unless the deed provides that the firm continues on death, the death of a partner dissolves the firm (Sec 42(c) IPA). Most deeds provide for continuation with the surviving partners, and admission of the legal heir or a new partner.
• Execute a supplementary or reconstitution deed: record the death (date), settlement of the deceased's capital (payable to heirs), admission of the new partner (capital, profit share), and revised profit-sharing ratio.
• File with the Registrar of Firms (if registered). Update PAN records, the bank, and GST (REG-14, core amendment for partners).
• Tax: the firm's assessment continues (Sec 187/188 for change in constitution). Settlement payments to heirs may attract 45(4) or 9B if assets or excess money are distributed.