1. Partnership deed will be required. Since it will be on the basis of the partnership deed, the bank will operate the account.
2. Please share a copy of the MoU for us to better understand the family arrangement.
Regards
Queries on Partnership and Private Limited Company-Under Arbitration
We had a family dispute and the arbitration award declared that the partership deed created without us was Null &Void and the movable and immovables assets will have to be split equally. Same for the P Ltd co.There was an appeal and finally we have signed an MOU for the splitting of the assets which the court passed for execution.1)The banks are requesting for creating a new partnership deed with all the partners for execution on the Bank A/cs reason being the partnership deed created excluding us is dissolved, is this necessary or is the MOU with court order sufficient 2) If we are not made partners, will we be taxed on the receipt of the settlement funds from the partnership as legal heirs Note:Though dormant rents are coming 3) Regards the Pvt Ltd Co( Dormant): There are some funds lying in the bank and some property. 1) Which is the cheapest way to transfer the funds lying in the bank? We were told that the best way is to sell the property and pay capital gains and then liquidate the company, then the funds will not be taxed any further to the co or the shareholder 2nd option is to value the company as sell the shares outright.
Asked 3 years ago in Taxation
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7 Answers
Is MOU registered
2) if so no need for new partnership deed
3) however no harm in executing fresh partnership deed
4) best way to transfer funds is sell the property and pay capital gains and then liquidate the company
The bank cannot demand to create a new partnership deed just for the purpose of execution especially when there is a court order in this regard.
If the bank is refusing to accept the execution order passed by the court then you can initiate contempt of court against bank provided the bank is a party to the concluded case.
If the bank is not a party to the case then you can reopen the case, implead the bank as a necessary party to the case, seek directions to the bank to settle the matter as per court order without insisting on its own ideas in this regard.
If you are willing to sell the property on the company name itself, i.e., liquidation then the company has to bear the long terms capital gains taxes as applicable.
The MOU was presented to the court and the court passed an order to get it executed, so it is stamped by the court( Is this treated as registered). The following qs i asked have not been answered, can you pls help me out; 1) With the Arbitration Award, the Partnership deed made without us should stand dissolved i guess. If so without a new deed will the banks have to follow the MOU instructions? 2) We were not added as partners after my fathers death, if we do no make a new partnership deed, will we be taxed for the funds distributed from the sale of property and the funds available in the banks. Please note there are rents still received though the business is dormant. The plan is to keep the rents coming till we sell the property. 3) If the MOU overpowers all previous docs, then based on that should the banks change the authorised signatories based on what is mentioned in the MOU and carry out the instructions of splitting and distributing amongst the parties?. We had mentioned that all Bank Accounts will have joint signatories, one from each family. 4) Sorry for reasons known i cannot share the MOU copy. But it basically talks about how we would calculate the funds lying in the Running accounts( some give and take) and about disposing the properties within a year and making all bank accounts joint operations with representaions from each family. 5) Regarding the Private Limited company. I wasnt clear with the answers. Is it efficient to sell the shares and the company and pay the capital gains indivdually as share holders or sell the land pay capital gains on it from the company side and then liquidate the company and distribute the funds to the shareholders. Can you please give your answers under each Q for easy understanding.
Asked 3 years ago
1) bank should follow terms of MOU signed by parties and filed in court
2) if any share is received form sale of property tjen you have to pay taxes on them
3) bank should change the signatories based on MOU
4) it is necessary to peruse MOU to advice
5) sell land pay capital gains tax
1. The court fee paid in the court towards the MOU is not considered as stamp duty, the stamp duty has to be paid to the registrar office.
As far as the partnership firm is concerned it stands dissolved by an order of the court or an arbitrator.
But on the basis of the MOU arrived between the partners and has got an approval you people are entitled to a share as mentioned therein hence the bank cannot insist you to reconstitute a new partnership firm or deed, the bank has to obey the court order if the bank is a party to the case before court.
2. The answer to your second question is available in the MOU itself, hence no opinion can be rendered beyond that.
3. The MOU has been recognised by court in its order and has passed an order to that effect hence the MOU shall be the base and guidelines in connection with all such further actions.
4. No comments
5. The second option is the one which is legally viable and valid.
1. yes if same is not challenged and attained finality
2. yes its correct
3.yes
5.its better to do from company's side
Dear client I am sorry to hear that but in this case and MOU with the courts order is sufficient
