Friends,
Can all the partners retire from the partnership firm and new partners admitted in place of them on the same day itself?, is it permissible under partnership act?
For eg., existing 2 partners retire simultaneous retire and new partners admitted on the same day
Please help me guys..
Thanks in anticipation.
All the partners can retire, their is no bar as per the provisions of the Partnership Act 1930.
But from Income Tax Angle also we have to see.
As per Section 78: Carry forward and set off of losses in case of change in the
constitution of firm or on succession:- Sec 78(1) Change in the constitution:- When a change has occurred in the constitution of a firm, then nothing shall entitle the firm to have carry forward and set off so much of the loss proportionate to the share of the retired or deceased partner as exceeds his
share of profits, if any, of the previous year in the firm. No partner can also avail the benefit of the said loss.
Sec 78(2) Succession:- Where any person carrying on any business or profession has been
succeeded to in such capacity by another person otherwise than by inheritance, nothing in the chapter VI shall entitle any person other than the person incurring the loss to have it carried forward and set off against his income.
may be this is helpful to you.
As per the provisions of Indian Partnership Act, there is minimum 2 parties to form a partnership firm. Hence it is not possible to retire existing 2 partners and invite admit new partners on the same day and more fully it is also not possible to retire existing one partner since there is no existence partnership. It is possible to invite two new partner to the firm first and on the next day existing 2 partners may retire from the firm.
Sir, can we make one deed only for admission of new partners first and next day all existing partners retire? please reply as soon as possible as it urgent for me. Thanks
CAclubindia
