Hi,
One of the Partner wish to Transfer his share in Asset of the firm to his wife.
Simply, his family member (wife) Name needs to be inserted instead of his name in the land which is now Firm owned, implicitly, he & his cousin are the current joint owners/partners. As the said partner is the major investor/managing partner of the firm (which is Non-functional currently), he holds 60% of share & the rest is his partner's, as per Partnership deed.
So, Can he Transfer the land (Undivided Property) DIRECTLY TO HIS WIFE IN WAY OF GIFT/SETTLEMENT as said in Transfer of Property Act (OR) He needs to brought her in as an INCOMING PARTNER OF THE FIRM (HE OUT..) AND TRANSFER ALL HIS RIGHTS/INTERESTS/SHARES OF PARTNERSHIP TO HIS WIFE?
Else, is it necessary/mandatory to make a SALE DEED BY HIM ALONG WITH OTHER PARTNER(S) & Transfer the land to his wife, in case not inducting her in Partnership? (Whereas, Stamp duty for Gift deed is only 1% but it is 7% for Sale deed, plus Registration costs 1%, in TN.)
In order to refrain from spending any extra costs unnecessarily, Either he may wish to continue in Partnership Or inducting his wife as partner, he would like to transfer/settle his share to his wife by way of Gift deed, with other partner's consent. So, what is the simple way out or how the Law to be enforced here..?!
Thanks in advance.
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Whether a Partner transfers his share in Asset of the Firm to his wife by Gift Deed?
Replies (3)
Yes, he can transfer but with the consent of all the partners. As the property is in the name of the firm, where other partners also have their share. This way he can transfer his share easily. But for that make sure that the above condition is met.
As per section 14 of the partnership act the property its rights and interests are deemed to have been acquired by the firm. In the case of Ranikant Golwala vs Natraj Theatre ( AIR 2000 GUJ 80) it was held that partnership property vests in the firm and it does not vest in any of the partners and hence it is impossible for any partner to pinpoint any portion of the partnership property as his own property. Now as to your question section 37 of the act states that if any partner ceases to be a partner and the continuing partners carry on the business of the firm with the property of the firm without any final settlement of accounts between then and outgoing partner or his estate then IN THE ABSENCE of a contract to the contrary the outgoing partner is entitled either at the option of himself or his representatives ( wife in this case) to such share of the profits. It is to be remembered that partner cannot transfer any part of the property of a firm till the continuation of the partnership.
My mother (partner) wants to retire from the partnership and gift all her rights/ interests/ share etc… to me (also a partner).
Could you please help me with the draft for the gift deed and any other documents required.
Thanks, Manish
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