Admission cum retirement in case firm, Other Topics

[shyam mhaskar]

In case of a partnership firm with two partners, whether the admission of two new partners and at the same time retirement of the old two partners could be possible. What could be the effect from the point of view of income tax, if the firm is having any immovable property in its fixed assets such as office premises, etc. Whether such arrangement is possible to keep partnership firm in existence. OR Whether such admission cum retirement may be held / treated as dissolution  by any revenue department such as income tax, excise, vat, etc.

Posts / Replies

[MARIAPPAN GOVINDARAJAN]

It is depending upon your partnership agreement. If there is no agreement as to the effect of retirement of partners, the partnership will be dissolved on retirement. If there is a clause that the partnership will continue even if any of the partner retires, then it will exist and the new partners may be included by inserting to the ratio of the liability/profit sharing.