Partnership Firm: legal questions
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
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.