Kirti Baid
Asked September 12, 2016

Partnership Firm: legal questions

  • 1 Answer

1] whether a partnership firm can become partner in a new partnership firm as per provisions of Indian Partnership Act 1932. 2] Whether a partnership firm can enter into partnership with private ltd. company, public ltd. company, individual, HUF, LLP etc. and form joint venture consortium

Answer 1

Thank you so much for writing to us. Here are the answers to your queries:

1. No. A partnership firm cannot become a partner in a new partnership firm. The reason being that the law only allows 'persons' to form a relation of partnership. The law recognises a company as a legal person, however a partnership cannot be treated as a legal person and hence the same cannot enter into a relation of partnership in a new firm. 

2.The answer shall remain the same for this question as well. Here again to form a new partnership, 'persons' have to form a relation. Please note that S. 4 of The Partnership Act 1932 says that Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.  Since a partnership firm does not fall under the category of 'persons', it cannot enter into a partnership with any other form of business. Hope we were able to satisfy your query. Feel free to write back. Happy to help.

Agree Comment 0 Agrees about 5 years ago

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