Since the property was in the name of firm, have to execute transfer deed to transfer ownership your name. Stamp duty will levy for valid transfer of ownrhsip.
Only way out.
Transfer of property to 1 partner in partnership firm
Hello sir i and my 2 partners run a namkeen business under name grain basket foods and we have a property also with the same name also enclosing partners name in that;now that firm has stopped business on 31st jan 2020 and my partners had taken their shares in amount and stock,but property is still not adjusted/shared/transfered/sold; Now i had formed my new proprietor ship firm with same name and i am carrying out business under the same new firm. Now we have to decide upon property that i am keeping property and my partners are not keeping it now how should we do so that i dont pay full stamp duty with registrar for transferring property on my single name tell me the options please how we can sort out property issue because present government guideline value is very high so let me know how should we solve this issue.
Asked 4 years ago in Property Law
Religion: Other
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12 Answers
Please let me know how should it be done whether to admit new partner and retire old partners or whether to dissolve firm and than i should purchase or any other option.my concern is that i need property on my name in government records land and revenue department so suggest me accordingly.
Asked 4 years ago
Any property legally transferred will attract stamp duty and registration
If the property is on joint ownership then you can make settlement deed and get registration for the reason of Dissolution of Partnership firm.
Deed of dissolution of firm should be executed
it should be provided that x property would be received by you in lieu of your share in assets of the firm
section 46 of the Indian Partnership Act makes it clear that in post-dissolution of the partnership, the firm’s property must first be applied to pay the debts and liabilities of the firm and only thereafter the surplus, if any, is to be distributed among the partners per the rights they have in respect of the partnership.
2)
- The property’s value must be assessed by a technical expert and partners are according to Sections 46 to 49, entitled for appropriate adjustment of their shares from the amount according to their share they held in the firm before the dissolution.
3)
- Post-dissolution
- All properties of a partnership are to be converted into money, and
- Therefore, any immovable property which belonged to the undissolved firm loses such ‘immovable’ character. Such properties have a status of ‘movable property’ post-dissolution, from which the respective shares of the partners must go to them.
1. IF Property documents are in Partnership Firm's name and same is reflected in the Income Tax Returns & Balance Sheet of Partnership Firm, THEN the best option for you is to induct another house person as partner and let the property be in name of Partnership Firm. This will not cost you anything.
2. However you would need to take proper resignation of other partners via a registered Settlement Deed, so that there is no futuristic legal claim or disputes.
The Supreme Court held that post-dissolution of firm each partner becomes entitled to his share in the profits of the firm post the settlement of accounts as per Section 48 of the Indian Partnership Act, 1932. The interest of the partners is in accordance with the proportion of their share in the firm.
The assets of the firm, including any sum contributed by the partners to make up deficiencies of capital, shall be applied in the following manner or order:
- In paying the debts of the firm to third parties.
- In paying to each partner rateably what is due to him from the firm for advances as distinguished from the capital.
- In paying to each partner rateably what is due to him on account of capital, and
- The residue, if any, shall be divided among the partners in the proportions in which they were entitled to share profits.
- Post-dissolution of the firm and dissolution of the property, the immovable property belonging to the firm before the dissolution becomes “a movable asset” in the hands of the partners inter se, who have their rights in terms of Section 48 of the Indian Partnership Act.
- The property’s value must be assessed by a technical expert and partners are according to Sections 46 to 49, entitled for appropriate adjustment of their shares from the amount according to their share they held in the firm before the dissolution.
- Consequently, the question regarding the status of the firm property post-dissolution may be answered in the following way:
- Post-dissolution
- All properties of a partnership are to be converted into money, and
- Therefore, any immovable property which belonged to the undissolved firm loses such ‘immovable’ character. Such properties have a status of ‘movable property’ post-dissolution, from which the respective shares of the partners must go to them.
You can keep partnership firm alive by adding a new partner however the assets of the firm shall remain on the firm's name alone and not on your name.
If you want the property to your name then you can purchase the property by a registered sale deed executed by all the partners jointly including you to yourself.
Dissolution of partnerships refers to the termination of the partnership relationship of one partner with other partners and the firm whereas the dissolution of partnership means the end of the partnership business. If an existing partner dies, retires or is unable to pay the debt then other partners can purchase the share of the outgoing partner and continue the business under the same name.
Dear Sir,
The best action will be to take resignation of the said partners, retire them and get the relinquish deed regarding the assets remaining to the firm. Then you may enter any other partner and the property of the firm ,may remain on your/name of existing partners.
You should execute a dissolution deed with your partner for dissolution of partnership in which you can make a clause that now the firm will continue the work as proprietor ship firm under your ownership and property will remain under the name of firm and retiring partner will not have any claim over that property.
- As per Section 37, of the Partnership Act, if a partner ceases to be a partner of the firm, and the remaining partners carry on the business without any final settlement of accounts between them and the outgoing partner, then the outgoing partner or his estate is entitled to share of the profits made by the firm since he ceased to be a partner.
- Further, the share may be attributable to the use of his share of the property of the firm or the interest at six percent per annum on the amount of his share in the property.
- Further, the surviving partner also has an option of purchasing the interest of the outgoing partner. If the surviving partner chooses to purchase the interest, then the outgoing partner is not entitled to any further share in profits of the firm.
- Further, profits or losses, made by a firm should be divided among its partners in accordance with the provision of their Partnership Deed. However, if there is no written or oral agreement among the partners, the Law prescribes that profits and losses should be shared equally by the partners.
- Since, you two are only partners in the partnership, hence upon leaving by him , the partnership will be automatically dissolved, and then the equally sharing of assets & capital will also arise.
