Registration of a charge on properties in a case of conversion of partnership firm to company
BIHARILAL LIYA
(Querist) 30 March 2012
This query is : Resolved
ONE OF MY CLIENTS, A PARTNERSHIP FIRM (IN GUJARAT) HAD BEEN OPERATING A CC ACCOUNT WITH A BANK SINCE 2009. HOWEVER, ON 1ST MARCH, 2012, THEY HAVE CONVERTED THEIR ENTITY INTO A PRIVATE LIMITED COMPANY UNDER THE PART IX OF THE COMPANIES ACT?. HOWEVER, ON APPROACHING THE BANK TO CHANGE THE CONSTITUTION OF THE ENTITY TO A COMPANY, THE BANK HAS STATED THAT THE MEMORANDUM FOR RECORDING DEPOSIT OF TITLE DEEDS SHALL HAVE TO BE REGISTERED AGAIN AND THE REQUIREMENTS FOR REGISTER OF CHARGE BY THE MORTGAGORS SHOULD BE RE-INITIATED BY PAYING THE REQUIRED STAMP DUTY @.35 PAISE OF THE LOAN AMOUNT(SINCE THE LOAN IS LESS THAN 2 CRORE). BUT, WE ARE OF THE OPINION THAT SINCE THE CHARGE HAS ALREADY BEEN CREATED BY THE MORTGAGORS ALREADY WHEN THE PARTNERSHIP FIRM WAS IN EXISTENCE, WE NEED NOT PREPARE THE MORTGAGE DEED/MOE AGAIN AND A CONFIRMATION DEED ON STAMP PAPER OF RS. 100/- WOULD SUFFICE. KINDLY ENLIGHTEN YOUR THOUGHTS ON THE MATTER!!
A V Vishal
(Expert) 30 March 2012
In the given case the stamp duty will not be attracted, becuase this event can not termed as transfer of property, and no stamp duty requires to pay on fresh documents also, you can link the old documents with fresh documents without paying stamp duty and register the charge with ROC. (Minor Stamp Duty of Rs.200/- for declaration cum Idemnity may required to be paid)
There is no change in identity of firm except because under Part IX you are converting the Partnership alongwith all assets and liablities, including court cases.
Shonee Kapoor
(Expert) 31 March 2012
Though I am not fully versed with the subject, I tend to agree with Vishal.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
