Incorporated companies can form partnerships if explicitly allowed in their constitution; otherwise, it's generally ultra vires.

A question was raised about whether incorporated companies can form partnerships with other individuals or companies. After consultation, it was determined that generally, such partnerships are ultra vires, as they may not align with a company's authorized objectives as outlined in its memorandum and articles of association. However, if a company's constitution explicitly permits such partnerships, it can proceed, provided it adopts special articles to address potential legal conflicts, particularly those highlighted in a Calcutta High Court ruling. State Governments should ensure that companies seeking partnership registration under the Indian Partnership Act, 1932, have such authorizations in their constitutions.

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