Remuneration
hetalsangoi
(Querist) 07 April 2014
This query is : Resolved
Can a private Ltd co be partner in the registered partnership firm? Remuneration & interest on capital clause applicable to private co. when it is admitted as a partner in a registered partnership firm?
Devajyoti Barman
(Expert) 07 April 2014
what is background details? looks like academic query.
R.V.RAO
(Expert) 08 April 2014
a Company is allowed to enter into partnerships. The following circular will make the position clear. The Deptt. of Company Affairs has in its Circular No. 1-81 (20-1-81-CL-V), dated 14-9-1981 expressed the following view: "A question has been raised whether an incorporated company can enter into a partnership with some other person or some other company. The matter has been examined by this department in consultation with the Department of Legal Affairs and I am directed to say that prima facie a company entering into a partnership with some other person or some other company would be ultra vires and will be against the principle that a particular company or an incorporated body cannot lawfully employ funds for purposes not authorised by its constitution which would normally be the memorandum and the articles of association. However, a company or an incorporated body, if so authorised by its constitution, can enter into partnership with an individual person or with another company irrespective of nationality and residence." A Company entering into a Partnership would require the company to adopt very special articles since many of the provisions of the Partnership Act would be difficult to apply to such a partnership. In view of this, while considering applications for registration of firms with bodies corporate as partners under the Indian Partnership Act, 1932, the State Governments should examine the applications before them and find out whether the memorandum and articles of association of the applicant incorporated companies contain any special articles which authorise the incorporated companies to enter into partnerships.
author : sri pankaj. k
source:http://www.linkedin.com/groups/could-private-limited-company-registered-118097.S.106059293
in the above same link sri barman ji of LCI also opined in the affirmative.
Remuneration:
note that remuneration is something paid to an individual for his/her services, but not to an organisation.
did you ever heard salary paid to a firm/
company?
interest to partners:
if partnership deed allows to pay interest on capital of a partner,the pvt.ltd.co.being a partner can be paid interest .
but remember the Memorandum of association and articles of association should allow the pvt.ltd. company to invest in a partnership firm and become a partner,in which case partner's liability will be unlimited.
Dr J C Vashista
(Expert) 08 April 2014
I fully agree and appreciate the expert advise of Sh. R V Rao wherein reply is affirmative except the remuneration to be paid.
R.V.RAO
(Expert) 08 April 2014
Thanks. Dr.sri. vashista ji.
T. Kalaiselvan, Advocate
(Expert) 09 April 2014
I too agree with expert Mr. Rao's views on the subject issue. Nothing more to add.
R.V.RAO
(Expert) 09 April 2014
Thanks.sri kalaiselvan ji.
Guest
(Expert) 10 April 2014
Well advised.
prabhakar singh
(Expert) 10 April 2014
There can not be any thing more to say about your query in addition to what has already been said by Mr.R. V .RAO.
Sourav Das
(Expert) 10 April 2014
agreed with expert Mr Rao
R.V.RAO
(Expert) 10 April 2014
thanks. sri prabhakar ji and sri sourav ji.
Rajendra K Goyal
(Expert) 11 April 2014
well advised by the expert RV Rao sir, agree to it.
R.V.RAO
(Expert) 11 April 2014
thanks. sri rajendra goyal ji.
