Investment in another company
7 months ago
Can a Partnership firm/ Private limited company invest in a proprietorship firm with oil marketing license owned by one of the Partner/Director
A.Dear Client,
Your query involves response to three categories of business or trades that requires individual clarifications depending upon the nature of business. As regards Partnership firm which is govened by the Partnership Act, 1932 and as per the terms and condition of a Partnership Deed executed by the partner. In the absence of any specific clause in the said agreement to that effect, and until and unless a partnership firm dissolve on the ground of resignatin or retirement, it cannot be converted into proprietorship business automatically. Alternatively, all the partners can sign an affidavit to dissolve the partnership firm and style it as a proprietorship firm owned by one partner after they collect their individual share of the investment in the partnership firm. A private limited company can also acquire the existing partnership firm with the assets and liabilities on its dissolution and on review of the rights of the creditors of the existing partnership firm.. As regards investment by Privte Ltd Company in Prorietorship business, it is possible only after the merger of proprietorship firm with the private company. The Board of Directors of the Company is required to take Board Approval for taking up the Sole Proprietorship firm. Takeover Agreement/ Sale Agreement is required to be executed between Sole Proprietorship and Company to transfer all its Assets and Liabilities. On the other hand, under Sec.18 of the Companies Act, 2013 explicitly grants the conversion of an already registered private limited company into an OPC (One Person Company)/Proprietorship company following the conversion requirements/formalities. The conversion of Private Company into OPC would not affect the responsibilities and contractual obligations of the company before conversion, and such claims, liabilities, obligations shall be enforceable by law, and the OPC shall be liable for them. For further clarification you need to consult with a corporate lawyer.
Your query involves response to three categories of business or trades that requires individual clarifications depending upon the nature of business. As regards Partnership firm which is govened by the Partnership Act, 1932 and as per the terms and condition of a Partnership Deed executed by the partner. In the absence of any specific clause in the said agreement to that effect, and until and unless a partnership firm dissolve on the ground of resignatin or retirement, it cannot be converted into proprietorship business automatically. Alternatively, all the partners can sign an affidavit to dissolve the partnership firm and style it as a proprietorship firm owned by one partner after they collect their individual share of the investment in the partnership firm. A private limited company can also acquire the existing partnership firm with the assets and liabilities on its dissolution and on review of the rights of the creditors of the existing partnership firm.. As regards investment by Privte Ltd Company in Prorietorship business, it is possible only after the merger of proprietorship firm with the private company. The Board of Directors of the Company is required to take Board Approval for taking up the Sole Proprietorship firm. Takeover Agreement/ Sale Agreement is required to be executed between Sole Proprietorship and Company to transfer all its Assets and Liabilities. On the other hand, under Sec.18 of the Companies Act, 2013 explicitly grants the conversion of an already registered private limited company into an OPC (One Person Company)/Proprietorship company following the conversion requirements/formalities. The conversion of Private Company into OPC would not affect the responsibilities and contractual obligations of the company before conversion, and such claims, liabilities, obligations shall be enforceable by law, and the OPC shall be liable for them. For further clarification you need to consult with a corporate lawyer.
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A.Dear Client,
Yes, a partnership firm or a private limited company can invest in a proprietorship firm with an oil marketing license owned by one of the partner/director, subject to compliance with applicable laws and regulations.
However, the specific terms and conditions of the investment, such as the amount, the nature of the investment, the ownership structure, the rights and obligations of the parties, and the exit strategy, should be clearly defined in a written agreement.
The agreement should also address potential conflicts of interest and ensure that the investment does not violate any legal or ethical standards.
Yes, a partnership firm or a private limited company can invest in a proprietorship firm with an oil marketing license owned by one of the partner/director, subject to compliance with applicable laws and regulations.
However, the specific terms and conditions of the investment, such as the amount, the nature of the investment, the ownership structure, the rights and obligations of the parties, and the exit strategy, should be clearly defined in a written agreement.
The agreement should also address potential conflicts of interest and ensure that the investment does not violate any legal or ethical standards.
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A.Dear Sir,
With the consent of the remaining partners/ remaining directors such investment may be made for the benefit such partnership firm/ private Ltd company.
With the consent of the remaining partners/ remaining directors such investment may be made for the benefit such partnership firm/ private Ltd company.
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