Go AD-Free with CAclubindia Pro and Daily Mobile Updates. Subscribe Now!

limited co. can be a partner in firm

Kadambni Jha (15 Points)

06 July 2018

A limited co. can become a partner in a partnership firm. why?

Reply
Follow
Share

2 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (195412 Points)
Replied 06 July 2018

Yes. A limited company whether public or private is a legal person capable of entering into valid contracts including partnership agreements.

Refer:: Circular-No-1.81-CL-V-Dt-14.09.1981.

2 Like

A-G-V (Student) (571 Points)
Replied 06 July 2018

A company being a separate legal entity having perpetual succession and being an artificial judicial person can very much become a partner in a partnership firm. The partnership deed may be signed by any one or more Directors on behalf of the company. The directors who are going to represent the company may be authorised by way of a separate board resolution.

Also board resolution need to passed for making investment in the Partnership firm. Before that ensure whether the articles of the company allow it to make investments. If not, amend the articles accordingly.

1 Like