PROPRIETOR TO PARTNERSHIP
Can a Proprietorship concern under Debt recovery tribunal be converted to Partnership firm? Will the new Partnership firm be liable for the debt? How can we keep the Partnership free from the debt?
Thanks for answering. more
Thanks for answering. more
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You cannot convert the existing proprietary concern which is already a debtor being proceeded against under the DRT into a partnership just like that. Anyone interested in acquiring the assets of the proprietary concern has of a necessity to shoulder the liabilities as well. The partner bringing in capital must understand this well and can have no claim to the assets alone and disown the existing liablities. Also you cannot have a private understanding with anyone and everything must be done with the knowledge, concurrence and cooperation of the DRT and the existing creditor(s). L.Kalavathi Retired Bank Official Chennai, Tamilnadu, India 29th May 2018 more
May 29
Dear Shaileshji You have not given any detail regarding your case and your place of reisdence. And the problem or issue you have mentioned is not as simple as it looks and the way the learned member of the circle have put it. Debt Recovery Tribunal is Governed by SARFAESI You have give only a fraction of the entire information that you have with you regarding your DRT case. SARFAESI act is one of the most powerful and prevailing act over any other act in India. Once your property is mortgaged with the bank or financial institutions and if you default on loan repayment, then banks have got all the right under the act to sell your property in public auction and recover its dues. You will have to take the persmission from the DRT itself to convert your proprietorsip to partnership firm. But trust me on this DRT laws are totaly different than other common Laws. The procedures are totally different depending on whether the property possesson is with the client or with the bank or financial institution. You can email the details advsheregar@gmail.com more
Apr 30
When a proprietorship firm is under debt recovery, he can form a partnership by selling the assets only to the partnership and from the sale proceeds he can close all the debts of proprietorship. But this also will be with the consent of the debtors. And debtors may consent to continue the debt in the name of the partnership. more
Apr 29
It depends upon the terms of Partnership Deed if all the partners are willing to take over debts alongwith assets of the firm.... or they may specifically deny to share such past debts more
Apr 29
As the matter is pending before the Debt Tribunal , partnership firm cannot be constituted ,unless the borrower /s agrees and the new partnership firm takes the financial liability of the proprietorship firm. more
May 06
