• What is the procedure to check if owner of a property is a partnership firm or individual?

Hello,

I am buying a 50% share Partnership Firm/business (Two Partners No 1 & 2).

Main assets of the business comprises of two plots & a building.

PLOT A - Registry in the name of Partner No.1.
PLOT B: Registry in the name of Partner No.2.


Partner No.1 says that he will add my name in the new partnership deed since the plots and building are in the name of the partnership firm by retiring PARTNER No.2 who is 50% owner in the partnership firm.

Partner No.1 & 2 mutually agree for the same.

Registry of Plots is in the name of individual partners which was done in year 1990 and capital asset (land and building) we're introduced in the partnership firm in the year 2000.

Balance sheet shows land and building under capital assets but there is no deed in the name of the partnership firm.

Partnership Firm is also not registered.

Question No.1

How to find out whether who will be the owner of the plots and building..partnership firm or individual partners since the registry is thier name since 1990? 

Question No. 2 

What is the general process to check if the owner of the property is the Partnership Firm ?

Question No.3 

Will there be any legal implication even if new partnership deed has been signed by me, the active partner and the retired partner ?

Question No.4

Will i have equal share and will be considered a owner after signing of the new partnership deed ?
Asked 6 years ago in Business Law

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25 Answers

1. See if under the partnership.deed the assets are bough under the firm by both partners then in that case it is property of the partnership firm.

2. You need to check the chain documents like the ownership deeds and the partnership.deed of the firm.

Mutation of the property.

3. No there won't be any implication you shall hold 50 percent or decided share in property of firm.

4. Yes you will he considered as partner and shall.habe equal right on assets of the firm.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

the property records can be checked from the register office by providing the detail of the property and their you can know the history of property in any partnership form if the property is belongs to to the partnership form then it will be registered in the partnership forms name not in the name of partners and any property which is registered in the name of the partner is not necessarily the property of partnership form so it is always advisable to check the property records from the register office by providing the property detail there you can get certified copy of the records for or detail of the property certified by the register.

Sofa the shareholding in the partnership is concerned it depends on the written partnership deed and if the shareholders of all the partners are written as equal shareholders then definitely you will have the equal share depending upon the share capital of the partnership firm it is also mention to notice that the entire property which belongs to the partnership form must be returned as the asset of the partnership firm to decide the actual value of the partners capital and in case where the equal share holding is defined the partnership firm must have the assets relating to all the partners in equal proportion

Vimlesh Prasad Mishra
Advocate, Lucknow
6851 Answers
23 Consultations

1.  If the partnership firm is not registered then it can be said that the properties do not belong to the firm instead it belongs to the individual partners alone since the partners have not taken any step to gt the property included in the assets of the firm.

2. The partnership deed, company' balance sheet may be perused and confirm the details of the property, if not available then you obtain the EC and find out that on whose name the property is existing now.

3. The partnership deed is an unregistered document hence anytime the deed ca be changed or it may not be pursued properly especially  during a dispute because it is not enforceable in law, hence you may better consult a CA before venturing into this partnership firm in any manner.

4. It depends on the conditions as set out in the partnership deed, hence without seeing the contents of the deed, no opinion can be rendered on it

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

If it's partnership firm the entry of the same will be in ROC office. 

If individual then sub registrar office

No legal implications

Yes equal share after signing

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

1) take 30 years title search in sub registrar office 

 

2) you will come to know who is the owner of property 

 

3) also insist that firm be registered with registrar of firm 

 

4)partnership firm can own immovable properties and have capital assets. These may be introduced by a partner or may be subsequently purchased by the firm. As soon as the property is acquired either by way of introduction by a partner or by way of subsequent purchase, it becomes a part of the assets of the partnership firm.

 

5)The resultant position in the eye of law is that the exclusive property of the person, who brought it in, would cease to be his exclusive property and would become the asset of the partnership in which all the partners would have interest in proportion to their share. The person who introduced the property in question would not be able to claim or exercise any exclusive right over any property which he has brought in, or over any other partnership property. He would not be able to exercise his right even to the extent of his share in the business of the partnership. This is all that a person who introduces his property in a firm of which he is a partner acquires as per the law declared by the Supreme Court in Addanki Narayanappa's case, AIR 1966 SC 1300, in unequivocal terms.

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

1. Check the Property Card  .OR. the 7x12 extract of the Property which will show the actual present "registered" owner of the property.  Also check the Sale Agreement IF property is claimed to be in Partnership firm.

2. Mere showing property in an "unregistered partnership firm" is ILLEGAL and a criminal offence of Cheating, Fraud, Forgery etc.... under the Income Tax laws.

3. Property in Individual Partner's name's belongs to individual partners and CANNOT be legally claimed to belong to a FIRM, for which Sale Deed must be in name of FIRM and not in individual name.

4. Unregistered partnership firm is illegal and a prosecutable offence under ROC rules.

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

File for search report of the property. 

That search report will have all the information about the history and ownership of the property.

Yes you will have equal share and will be considered a owner after signing of the partnership deed.

Thanks 

Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

Partnership firm can not hold any property in its own name. Ownership remain with individual partners collectively.

Check the registered deed. You will see the name of the purchaser and seller.

Your ownership to firm firm assets shall be in accordance with terms of partnership deed. 

All assets of partnership firm are joint held by all partners. 

 

Kallol Majumdar
Advocate, Kolkata
2837 Answers
14 Consultations

Plots are in the name of partners, will remain their ever after resignation. Only building is in the name of firm and since the firm is not registered, partners are owners. 

Partners have to transfer their ownership in the firm and firm will register than only firm will own assets.


And than only you will acquire the right on the assets of firm.

Yogendra Singh Rajawat
Advocate, Jaipur
23079 Answers
31 Consultations

Stamp duty payable to transfer immovable property to firm.

Yogendra Singh Rajawat
Advocate, Jaipur
23079 Answers
31 Consultations

Assets can not be transferred in partnership firm name. Only a recital to this effect are mentioned in partnership deed.

You go to the registration office and check the land records deed in whose name it is registered. Things will be clear to you.

Kallol Majumdar
Advocate, Kolkata
2837 Answers
14 Consultations

1. Property/s are in individual names of Husband & Wife, under their own respective PAN card no. and the same is also reflected into their own Income Tax Returns.

2. If above property/s are now to be transferred to Partnership Firm, THEN proper Sale Deed with full Stamp Duty & Registration Fees are applicable, more so specifically since the Firm shall be having its own PAN Card no, and the property will need to be reflected in the Firm's Income Tax Returns.  There is no exemption on this.

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

Yes the stamp duty is required to be paid for transfer of the plots to the partnership firm without transferring the plot to the partnership firm the partnership from will have no right on the property and that will stand as individual property

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Vimlesh Prasad Mishra
Advocate, Lucknow
6851 Answers
23 Consultations

It would attract stamp duty of assets are transferred from individual to partnership firm 

 

2) 

If the immovable property is being transferred formally from a partner's name to the partnership firm's name or in joint names of the partners, and there is a regular transfer / conveyance deed, etc., then of course, payment of registration fee, stamp duty, etc., would be required

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

Property being Conveyed to partnership firm through the deed stamp duty on same is applicable.

 

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

If the immovable property is being transferred formally from a partner's name to the partnership firm's name or in joint names of the partners, and there is a regular transfer / conveyance deed, etc., then of course, payment of registration fee, stamp duty, etc., would be required.

 

Section 45(3) has been introduced in the Income-tax Act, 1961 (Act) by the Finance Act, 1987 w.e.f 01.04.1988. Section 45(3) states that “the profits or gains arising from the transfer of a capital asset by a person to a firm or other association of persons or body of individuals (not being a company or a co-operative society) in which he is or becomes a partner or member, by way of capital contribution or otherwise, shall be chargeable to tax as his income of the previous year in which such transfer takes place and, for the purposes of section 48, the amount recorded in the books of account of the firm, association or body as the value of the capital asset shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset”.  

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

You Have to visit The Office of Registrar of Firms of The state and Make An inquiry about the status of partnership firm registration at the Registrar office..

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

1. Apply for copy of mutation records and true copy of documents of plots. 

2. On sales deed of plot Name of owner will be name of partnership firm.

3. Yes you will become equal partner in profit and loss of the firm. 

4. If the properties are in name of partnership firm then you will become co-owner of property as partner in the firm.

Mohit Kapoor
Advocate, Rohtak
10686 Answers
7 Consultations

Yes.

6%.

Circle rate.

Yogendra Singh Rajawat
Advocate, Jaipur
23079 Answers
31 Consultations

Stamp duty in UP would be 2 per cent of market value of property 

 

2) property cannot be gifted to private limited company as company is an artificial person and cannot claim to get property out of love and affection 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

Since a company is an artificial person, it cannot claim to get or give love and affection. Hence a company cannot give gifts and hence cannot execute a gift deed. ... However, there are various status under which a property can be transferred by a company or to a company without monetary consideration.

If you gifted the property to the company, the company would not owe you anything, and as such there should not be a creditor in the balance sheet. ... You would effectively be selling the property at full market value, and then leaving the proceeds outstanding via a DLA and extracting in the future.

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

a company is an artificial person.it cannot claim to get or give love and affection.
stamp duty is state subject varies from state to state.

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

1. A gift deed in favor of son can he made the duty applicable stamp.duty shall be 2 percent at circle rate.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

1 yes it will attract. 

2. Yes it can be gifted with registered gift deed. 

3. It will be 2 percent of applicable circle rate

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

Yes property can be gifted to pvt ltd company.

Duty will depends on the law of Uttar Pradesh 

Stamp duty will be according to circle rate.

Mohit Kapoor
Advocate, Rohtak
10686 Answers
7 Consultations

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