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CA Foundation doubt

Can a partner in a partnership firm also be a partner or employee in an LLP or company under the Partnership

I had doubt in business law

I had doubt in business law That if a person is in patnership business, and also he is in llp or company . If is legally applicable to patnership business or not

Asked by Scp··6 answers

6 replies

  1. BrunoAI answerAI first answer — verify with your teacher

    Yes, it is legal. Nothing in the Indian Partnership Act, 1932 stops a partner from also being a partner in an LLP or a shareholder or director of a company. He can hold all three roles at once. Key points: 1. Each is a separate arrangement. The firm, the LLP and the company each have their own rights and liabilities, and each follows its own Act and agreement. 2. Competing business (Sec 16(b)): if his LLP or company runs a business of the same nature that competes with the firm, he must account for and pay those profits to the firm, unless the partners agree otherwise. 3. The partnership deed or LLP agreement can restrict outside business, so check it. 4. He still owes the firm good faith, true accounts and no secret profits. If you meant something else, such as a company or LLP itself becoming a partner, reply and I'll explain.

  2. Scp

    No I said that that person is a patner in one form , but he also works in llp or company as another job , so is it legal according to indian patnership act 1932

  3. Vala

    Yess

  4. Yash

    Yes, a person can legally be involved in all three businesses at the same time, subject to certain legal conditions. 1. Relevant Provisions. Partnership Act, 1932 – Section 4: Two or more persons can form a partnership to run a business and share profits. LLP Act, 2008 – Section 5: An individual can become a partner in an LLP. Companies Act, 2013: An individual can become a shareholder or director of a company, subject to applicable conditions.

  5. Vala

    Okay

  6. Goswami

    Yes it is legal, because nothing in the Indian partnership act 1932

Related questions

Can a partner start a competing business while in a firm?

He can, but under Section 16(b) he must account for and pay to the firm any profits from a competing business of the same nature, unless partners agree otherwise.

Can the partnership deed stop a partner from taking another job?

Yes, partners can agree in the deed to restrict outside business or employment, and such terms bind them.

Is a firm, an LLP and a company governed by the same law?

No. A firm follows the Partnership Act, 1932, an LLP follows the LLP Act, 2008 and a company follows the Companies Act, 2013.

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