27 November 2011

Admission of New Partner in Firm, Procedure for Regisration

Indian Partnership Act, 1932, Procedure for Registration of Deed of Admission in Maharashtra
An existing partnership firm may find it necessary to introduce new partner into the business of the firm. Such introduction of new partner is also termed as “Admission of Partner”.
Need to Admit new partner may be for various reasons. Some of them have been listed below.
  1. New partner may be introducing capital for growth of existing business or starting new project (expansion/diversification of business).
  2. He may be a technical person and may be capable to make technical contribution to the business of firm.
  3. The existing partner may be retiring and new partner may be required to bring in capital to repay the capital of retiring partner.
  4. The new paratner may be legal heir of deceased partner. 
Such partner may be admitted for various reasons.
Section 30 of Indian Partnership Act, requires that such partner can be  introduced only with the consent of all the existing partner. The consent is put in writing by signing a agreement which is called as Deed of Admission. The Deed of Admission must contain the terms regularly contained in Partnership Deed along with the terms of introduction on new partner. It may specifically contains the details of capital introduced by new partner, the new profit and loss sharing ratio amongst all partners, new terms of payment of remuneration to the partners and other terms and conditions laying down rights and duties of partners, etc.
The Deed of Admission must bear the necessary stamp payable under the stamp act applicable in the state in which the partnership deed is signed. It is also advisable to get the deed registered with the Register of Firms of the concerned state in which partnership business is constituted.
In state of Maharashtra the stamp duty payable as per Article 55 of Bombay Stamp Act, 1958 is as under.
Capital Contribution by Partner Stamp Duty Payable
For a capital contribution of Rs. 50,000/- or less Rs.500/-
For every additional capital of Rs. 50,000/- or part thereof Rs. 500/-
Maximum stamp duty for any amount of capital Rs. 5,000/-
For capital contributed in form of property Same duty as on conveyance on market value of property under Article 25 of Bombay Stamp Act, 1958
Additional Stamp Duty at the time of admission of partner may be payable on additional contribution made by partners as evidence by Deed of Admission.
Procedure for Registration with “Registrar of Firms” as applicable in Maharashtra State.
  • Application for admission of partner is to be made along with Form E.
  • Application should be with Court Fee of Rs.5/-
  • Form E must be signed by all partners, continuing as will as new and must be notarised by notary.
  • It must be made within 90 days of admission of partner.
  • Penalty of Rs.10/- per day will be imposed if application is not made within 90 days
  • Application is be made along with fee of Rs.400/-.
  • Certified copy of Partnership deed must be attached to the deed.
  • Admission deed must also be translated in Marathi.

    Specimen for Form E for Maharasthra State