Tenancy rights of retiring partner
abhay pethe
(Querist) 23 December 2017
This query is : Resolved
Old partnership firm having 2 pagdi properties. Current partners are 2nd generation. The rent receipt is in the name of the firm. The value of tenancy or property does not appear in the balance sheet of the firm. Property has probably been purchased by original partners (now dead) around late 1950's to early 1960's, but no record of purchase exists.
Current value of property is very high whether ownership or tenancy.
One partner wishes to retire. Does retiring partner have a right in the value of tenancy if other partners want to continue business from same premises ? Or does he get only his capital seen on the books of account of the firm ?
Because the capital does not include the value of tenancy.
Kindly advise.
P. Venu
(Expert) 24 December 2017
The matter requires professional consultation.
Dr J C Vashista
(Expert) 25 December 2017
The property is on lease wherein title is with the "owner"/landlord and value of the demised property cannot form part of capital of the firm.
Tenant can never step in the shoes of owner irrespective of time elapsed.
Partner may retire without considering/accounting value of the tenanted premises.
Consult a local lawyer for proper guidance and proceeding.
