Categories: Partnership Firm

Do you want your company partnership to any other company

1.Investment of funds of your company in another partnership firm for a joint venture with another company. Any other entity or person or in order to commence a new partnership is possible. Your company may join in partnership with any other partnership or any other entity or person. Start a company partnership with the nature of a joint venture or otherwise.

Company partnership to any other company or person

2.Verify from memorandum of association. Whether it permits you to enter into such partnership.

3. Call and hold a board meeting for the purpose of authorizing the partnership of your company for investing funds. Where they can to appoint a director or other officer of the company. The company may sign and execute the deed of partnership or joint venture.

4. If the partnership or joint venture requires funds in the nature of capital funds, say, by way of contribution to the capital of the firm. It must be duly authorised. Investing in the capital of a partnership firm registration will not acquire shares. Other securities within the meaning of section 186 of the 2013 act.

5. A partnership firm is not a body corporate. Unless it is a limited liability partnership.

6. The persons are united to share the profits of a business expressed on by all is known as ” partnership “. If a Person who have registered into partnership with one another are known as individually partners and together with a firm. The company name under which the business is carried on is called the firm name.

7. However, if any loan or guarantee or security to be given to the partnership. The provisions of section 185 and 186 of the 2013 act will apply. Accordingly, if the partnership is a person in whom a director of your company is interested, granting loans or providing guarantees or security should be deemed to be prohibited except to the limited extent permitted under the act. For this purpose, please check if it is possible to grant the loan or guarantee or security.

8. If the transaction is not hit by section 185 of the act. The immediate step is to check. If whether the quantum of loan or value of guarantee or security proposed to be made to the partnership firm together with all the loans, guarantees and securities already granted would exceed the limits prescribed under section 186 of the 2013 act. For the purpose of registration under these sections.

9. It is necessary to follow the usual procedures relating to calling and holding a meeting of the board of directors. It is issued by the Institute of Company Secretaries of Chennai, India under the section 118 of the 2013 act.

10. If the borrowings proposed to be made from by other company will exceed its 60% of the paid up capital. The free reserves or 100% of the free reserves. Such borrowings could be resorted to only. If the consent of the company by a special resolution is obtained. It is not necessary to reckon within the meaning of “borrowings” any temporary loans obtained by a company from its bankers in the common period of its business. This provision is not applicable to private limited company in view of notification is issued by the ministry of corporate affairs.

11. Every resolution passed by a company according consent to the exercise by its directors.

12. In this respect:

(i) Every such resolution is necessary to be registered with the ROC (Registrar of Companies ) within 30 days of passing of the resolution.

(ii) Section 403 of the 2013 act grants in its proviso to sub-section (1) additional time limit of 270 days that from the date by which it should have been submitted recorded, filed or registered .

(iii) Thus in the case of Form No. MGT-14 from the date of event. A total 300 days is available for completing the filing or registration requirement.

(iv)If the time limit including the additional time limit specified under section 403 of the 2013 act. Wherever applicable, has expired. The relevant e-Form or as the case may be the relevant application cannot be filed. Unless the delay in doing the same has been condoned by the central government as per section 460 of the 2013 act.

13. Where the person to whom the loan is granted is a company. It must be noted that the power to borrow must be exercised. Only at board of directors or a committee of directors. In view of specific provision contained in section 179 of the 2013 act, similar compliance by holding a board meeting. Filing a copy of the resolution in Form No.MGT-14. It is followed by the recipient company also.

14. Please ensure that

(i) Loans and advances from related parties should be shown separately in the balance sheet.

(ii) Loans and advances due by directors or other officers of the company or any of the directors. Either severally or jointly with any other person or amounts due by firms or private limited companies. Respectively in which any director or a member, director is a partner shall be severally stated in the balance sheet.

(iii)Debts receivable by directors or other officers of the company or any of them either jointly or individually with any other debts due or person by firms or private limited company. Respectively in which any director is a member or a partner or a director should be severally declared. Under the head Trade Receivables in the balance sheets of the company partnership deeds.

15. Without prejudice to the above requirements, It is necessary to see of the partnership will come within the meaning of a “joint venture” as defined.

16. In case it is a joint venture, apart from complying with the accounting standard AS 27. As the case may be provisions of Ind AS 3. It is necessary to prepare and furnish consolidated financial statements too.

17. If the business proposed to be carried on falls within the objects clause of the company. If the business activity is going to be carried on by the partnership firm. What company does is only to put its money in the capital of the firm. The company is a separate entity cannot be said to be carrying the business activity that the firm intends to carry on.

If the business proposed to be carried on by the firm is not germane with the objects of the company partnership. It would be advisable to have the objects clause of your company amended. So as not to give room for any interpretation. Whether the activity proposed to be undertaken by your company is likely to be termed as “ultra vires”. For the purpose of registration of objects of your company.

18. Please ensure that the partnership of the firm is duly registered. The partnership firm registration is optional. Unregistered partnership firms will not be able to enforce its contractual rights in view of section 69 (2) and (3) of the Indian Partnership Act 1932. The difficulty doesn’t arise in the case of limited liability partnerships where registration is mandatory.

19. Disclose particulars of investments and other exposures in the financial statements. Where the company and the partnership firm are registered in their regulations.

20. If there is any special provision under the shareholders agreement. Any other agreement with respect to entering into a partnership or joint ventures. Please ensure to comply with those provisions with the registration in Chennai.

21. Any joint venture abroad with require compliance of the provisions of the Foreign Exchange Management Regulations, 2004.

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