Please Help: Income taz
Posted Date : 07-Jan-2017 , 07:06:08 pm | Posted By: SABREZ ALAM
Category :
Income Tax | Answers :
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Whether immovble property can be purchase in the name of a proprietry firm (M/s abc & associate) Then section 56 (2)vii) will be applied as a deemd sale. |
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| Posted By : JAYA MITTAL |
13-Jan-2017, 11:30:39 |
| A Partnership is not a legal entity and the name of the partnership firm is only a collective expression representing all the partners constituting the firm.
Thus a transfer of property can only be made by or in favour of a legal or juridical person as provided in Section 5 of the Transfer of Property Act. A Partnership firm unlike a Company registered under the Indian Companies Act, does not have a separate legal identity, different from partner and a partnership firm cannot sell or purchase property in its name. A partner has no implied authority to sell or buy any immovable property on behalf of the partnership. The legal entity is the partner himself.
All partners in their individual capacity should also join as parties to the agreement to sell or to the conveyance deed and execute it in their individual capacity. When an immovable property is transferred to a firm it vests in all the partners of the firm and not in the firm, since the firm has no separate legal existence.
At certain times, a single partner represents the partnership firm, which is not a correct practice. In such cases, the said partner should have power of attorney or authority of other partners to execute the documents.
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