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First of all, we need to understand the consideration being given to the partnership firm. I'm assuming that you are talking about a general partnership firm and not LLP. General partnership firm exists because of the partners. Hence the partners need to be compensated during this acquisition.
If the private limited company is giving equity fo...
Wazzeer Professional Network
ProfessionalWhat are the legal requirements for a private company to take over a partnership firm in India?
-
Wazzeer Professional Network
ProfessionalFirst of all, we need to understand the consideration being given to the partnership firm. I'm assuming that you are talking about a general partnership firm and not LLP. General partnership firm exists because of the partners. Hence the partners need to be compensated during this acquisition.
If the private limited company is giving equity for the acquisition then both private limited company and the partnership firm needs to be valued and the partners of the firm should be allotted the shares as per the valuation.
If cash is being given as consideration in this transaction then in the books of accounts an expense is created for the cash outflow and an asset is created in the name of the company. But the cash should be paid to the companies account only.
about 4 years ago
View answer
What are the legal requirements for a private company to take over a partnership firm in India?
-
Wazzeer Professional Network
ProfessionalFirst of all, we need to understand the consideration being given to the partnership firm. I'm assuming that you are talking about a general partnership firm and not LLP. General partnership firm exists because of the partners. Hence the partners need to be compensated during this acquisition.
If the private limited company is giving equity for the acquisition then both private limited company and the partnership firm needs to be valued and the partners of the firm should be allotted the shares as per the valuation.
If cash is being given as consideration in this transaction then in the books of accounts an expense is created for the cash outflow and an asset is created in the name of the company. But the cash should be paid to the companies account only.
about 4 years ago
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