Whether EEFC account can be opened by special economic zone units?

Exchange earners foreign currency account (EEFC) is an account maintained in foreign currency with an authorised dealer i.e. a bank dealing in foreign exchange. It is a facility provided to the foreign exchange earners, including exporters, to credit 100% of their foreign exchange earnings to the account, so that the account holders do not have to convert foreign exchange into rupees and vice versa, thereby minimising the transaction costs. But when the question arises that whether EEFC account can be opened by Special Economic Zone units, then the answer is big No.

All categories of foreign exchange earners, such as individuals, companies, etc. who are resident in India, can open EEFC accounts. Special economic zone (SEZ) units cannot open EEFC accounts. But, a unit located in an SEZ can open a foreign currency account with an authorised dealer in India subject to certain conditions. SEZ developers can open EEFC Accounts.

An EEFC account can be held only in the form of a current account. Cheque facility is available for operation of the EEFC account. No interest is payable on EEFC accounts. 

Up to 100% foreign exchange earnings can be credited to the EEFC account. However, the sum total of the accruals in the account during a calendar month should be converted into rupees before the last day of the succeeding calendar month after adjusting for utilization of the balances for approved purposes or forward commitments.

Let me describe a few about Special Unit Zone also;

The Special Economic Zone (SEZ) policy in India first came into inception on April 1, 2000. The prime objective was to enhance foreign investment and provide an internationally competitive and hassle free environment for exports. The idea was to promote exports from the country and realising the need that level playing field must be made available to the domestic enterprises and manufacturers to be competitive globally.

 Legislation has been passed permitting SEZs to offer tax breaks to foreign investors. Over half a decade has passed since its inception, but the SEZ Bill has certain drawbacks due to the omission of key provisions that would have relaxed rigid labour rules. This has lessened India's chance of emulating the success of the Chinese SEZ model, through foreign direct investment (FDI) in export-oriented manufacturing.

The policy relating to SEZs, so far contained in the foreign trade policy, was originally implemented through piecemeal and ad hoc amendments to different laws, besides executive orders. In order to avoid these pitfalls and to give a long-term and stable policy framework with minimum regulation, the SEZ Act, '05, was enacted. The Act provides the umbrella legal framework, covering all important legal and regulatory aspects of SEZ development as well as for units operating in SEZs. 

Since the rules will take care of many issues, the Special Economic Zone Act is likely to take some more time and the government is unlikely to notify them before September 1. The commerce and industry ministry is examining the domestic industry's comments on draft SEZ rules. A meeting of development commissioners of all SEZs will be convened soon to discuss the changes that need to be incorporated before they are notified to be placed before the parliament for final approval.

The objective of the SEZ Act was to create a hassle-free regime and the rules would be formulated keeping this in mind. The ministry is also holding talks with state governments as they have to play an important role in the development of SEZs.

What is a Special Economic Zone(SEZ)?

Special Economic Zone (SEZ) is a specifically delineated duty-free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs. In order words, SEZ is a geographical region that has economic laws different from a country's typical economic laws. Usually the goal is to increase foreign investments. SEZs have been established in several countries, including China, India, Jordan, Poland, Kazakhstan, Philippines and Russia. North Korea has also attempted this to a degree. 

Some of the permissible credits into EEFC account

i) Inward remittance through normal banking channels, other than remittances received on account of foreign currency loan or investment received from abroad or received for meeting specific obligations by the account holder;

ii) Payments received in foreign exchange by a 100% export oriented unit;

iii) Payments received in foreign exchange by a unit in the domestic tariff area for supply of goods to a unit in the SEZ;

iv) Payment received by an exporter from an account maintained with an authorised dealer for the purpose of counter trade. (Counter trade is an arrangement involving adjustment of value of goods imported into India against value of goods exported from India);

v) Advance remittance received by an exporter towards export of goods or services;

vii) Professional earnings including directors fees, consultancy fees, lecture fees, honorarium and similar other earnings received by a professional by rendering services in his individual capacity;

viii) Re-credit of unused foreign currency earlier withdrawn from the account;

ix) Amount representing repayment by the account holder's importer customer, of loan/advances granted, to the exporter holding such account; and

x) The disinvestment proceeds received by the resident account holder on conversion of shares held by him to ADRs/GDRs under the Sponsored ADR/GDR Scheme approved by the Foreign Investment Promotion Board of the government of India.

Foreign exchange earnings received through an international credit card for which reimbursement has been made in foreign exchange may be regarded as a remittance through normal banking channel and the same can be credited to the EEFC account. There is no restriction on withdrawal in rupees of funds held in an EEFC account. However, the amount withdrawn in rupees will not be eligible for conversion into foreign currency and for re-credit to the account.

Some of the permissible debits into this account :-

i) Payment outside India towards a permissible current account transaction [in accordance to the provisions of the Foreign Exchange Management (Current Account Transactions) Rules, 2000] and permissible capital account transaction [in accordance to the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000].

ii)  Payment in foreign exchange towards cost of goods purchased from a 100 percent Export Oriented Unit or a Unit in (a) Export Processing Zone or (b) Software Technology Park or (c) Electronic Hardware Technology Park

iii) Payment of customs duty in accordance with the provisions of the Foreign Trade Policy of the Central Government for the time being in force.

iv) Trade related loans/advances, extended by an exporter holding such account to his importer customer outside India, subject to compliance with the Foreign Exchange Management (Borrowing and Lending in Foreign Exchange) Regulations, 2000.

v) Payment in foreign exchange to a person resident in India for supply of goods/services including payments for airfare and hotel expenditure.

Can foreign exchange earnings received through an international credit card be credited to the EEFC account - 

 Yes, foreign exchange earnings received through an international credit card for which reimbursement has been made in foreign exchange may be regarded as a remittance through normal banking channel and the same can be credited to the EEFC account.

 CONCLUSION-

Thus, I would like to conclude my article here and I have cleared that EEFC account cannot be opened by Special Economic Zone Units and gave a brief about EEFC account and Special Economic Zone too and I have added some of the permissible debits and credits points which come under EEFC account.

Roles and responsibilities of Debenture Trustee

ROLES AND RESPONSIBILITIES OF DEBENTURE TRUSTEE

Before shading a light on the roles and responsibilities of debenture trustee, let’s know first what debenture trustee actually means and from where it derived. Even in business issuing debentures is one of the ways to raise the working out of the companies, as it is very different from other kind of shares. The advantage of being a debenture holder is in the moment of the bankruptcy or winding up the debenture holders are considered to be as the creditors and they were the one who are re-pay first.

A debenture is an instrument of debt executed by the company acknowledging its obligation to repay an amount at a specified rate and also carrying an interest. It is just like a certificate of loan evidencing the fact that the company is liable to pay the loan with an interest and although the money raised by the debenture becomes a part of the company’s capital structure as it does not become a share capital. But before proceeding further let me also mention that who is a debenture trustee and who can be appointed as a debenture trustee, so a debenture trustee is a trustee of a trust deed for securing an issue of debentures of a corporate body, and to act as a debenture the entity should be a scheduled bank carrying out a commercial activity, a public financial institution, more over the entity should be registered to SEBI to act as a debenture trustee.

To apply for the registration of debenture trustee an applicant will be required to pay a non-refundable fee of Rs. -50,000/- by a demand draft and the challan will be made in favor of Securities and exchange board of India , payable at Mumbai, and the certification of an initial registration will be valid up to five and if the debenture trustee wish to have permanent registration then he have to apply 3 months before the end of initial registration and for this he have to pay an amount of Rs.9,00,000 for every three years.

ROLES OF DEBENTURE TRUSTEE

1.   To call for periodical reports from the body corporate, i.e. issuer of debentures.

2.   To take possession of trust property in accordance with the provision of the trust deed.

3.   To ensure a continuous basis that the property which charged to debenture is available and adequate at all times to discharge the interest and principal amount payable in respect of the debentures and that such property is free from any other encumbrances except those which are specifically agreed with the debenture trustee.

4.   To enforce security in the interest of the debenture holders.

5.   To exercise due diligence to ensure compliance by the body corporate with the provisions of the company act, the listing agreement of the stock exchange or the trust deed.

6.   To take appropriate measures for protecting the interest of the debenture holders as soon as any breach of the trust deed or law comes in his notice.

7.   To ascertain that the debentures have been converted or redeemed in accordance with the provisions and conditions under which they are offered to the debenture holders.

8.   Inform the board immediately of any breach of trust deed or provision of any law.

9.   To appoint a nominee director on the board of corporate body when required.

RESPONSIBILITIES OF DEBENTURE TRUSTEE

1.   The trustee ensures that there is no breach in the terms of issue of debentures.

2.   The trustee can take steps to remedy the breach.

3.   The trustee is a person who informs the debenture holders about such breach.

4.   The trustee ensures that all the conditions regarding creation of security for debentures are met.

5.   The trustee convenes the meeting between the company and the debenture holders.

6.   The trustee is the person who ensures that the debentures are redeemed as per the conditions agreed upon.

7.   The trustee can take steps to resolve the dispute between the company and the holders.

8.    The trustee has to take necessary steps to ensure the interest of the debenture holders.

                                                  Thus, debenture trustee is a person who is responsible for issuance and distribution of debentures. A debenture trustee is a person or entity that serves as the holder of debenture stock for the benefit of another party. When a company is looking to raise capital, one method of accomplishing this is by issuing stock as a form of debt with the obligation to repay the debt at a specific interest rate. The trustee serves as a liaison (the person who keeps in contact with different groups) between the company that issued the debentures and the debenture holders that are collecting interest payments.  According to SEBI Rules, 1993- “debenture trustee” means a trustee of a trust deed for securing any issue of debentures of a body corporate [section 2 (bb)]. (Applicable to public companies only)

Eligibility for a debenture trustee: To act as debenture trustee, the entity should either be a scheduled bank carrying on commercial activity, a public financial institution, an insurance company, or a body corporate. The entity should be registered with SEBI to act as a debenture trustee.

    

                                    By,

                    Utkarsh Kumar

                          

Tax aspects of Start Up India, Stand Up India

 TAX ASPECTS OF START UP INDIA, STAND UP INDIA

India is the land of opportunities and as far as the opportunities are concerned India never lags behind. In today’s era things are changed and now opportunities are there but the thing is how to grab it. No doubt, we all know that Indians have a specific talent in every specific field but to utilize that talent a boost is always needed from the behind, and to encourage them our Prime Minister Shri Narendra Modi initiated for many schemes where the Republic Of India can utilize it for their benefit so there will be less unemployment in country, among all of schemes there is a scheme “START UP INDIA, STAND UP INDIA” as this campaign was first announced by our Prime Minister Shri Narendra Modi on 15^th August 2015 at Red Fort. As this campaign is based on an action plan aimed at promoting bank finance for starting up the ventures and to boost entrepreneurship and encourage those start-ups with an aim of job creation also. The Stand up India initiative is also aimed to boost entrepreneurship among SC’s / ST’s and towards women communities also. As it is also focused on to restrict the roles of States in policy domains and to get rid of various licence hindrances like land permission, environmental clearances, foreign investment proposals. As this event was launched on 16^th January 2016 by our Finance Minister Shri Arun Jaitley and top investors, CEO’s, start up founders took part in the campaign. This programme will be connected through entire IIT’s, IIM’s, NIT’s and central universities of our nation.

         The tax aspect of “Start up India and Stand up India” as Shri Narendra Modi exempted tax for 3 years from the capital gains of the start-ups. According to him profits earned by the start-ups will be exempted from the tax for three years of business. Tax will be exempted only when the investment is above the fair market value. So to boost finance 20% on the capital gains made by the investments by the entrepreneurs after selling their own assets as well as the government’s recognised venture capitals will also be exempted. There is a provision in the Income Tax act, if a start up receives equity funding which exceeds the market value of a firm then those excess considerations will be taxable in the hands of the receipts. Here the start-ups would be eligible for tax benefits only when it has obtained a certificate from the Inter-Ministerial Board. So the process of seeking these certificates would be made completely online and would be time bound.

 Outcomes of tax exemption are:-

1.   Tax exemption on capital gains – An objective of tax exemption on capital gains is to promote investment in the start-ups by mobilizing the capital gains arising from the sell of capital assets, as because of the high risk nature thee start-ups are not able to associate with the investment in the initial stage. It is therefore important that suitable incentives are provided to the investors for investing in the start up ecosystem. An exemption will be favouring to those persons who have capital gains during the year and if they have invested such capital gains in the funds recognised by the Government. This will augment the fund and available to various VC’s , AIF’s for the investment in the start-ups. In addition to this existing capital gain tax exemption for investment in newly formed manufacturing MSME’s by the individuals and shall be extended to all the start ups. Now those entity needs to purchase a new assets with the capital gain received to avail such exemption. For instance investment made on computer or computer software shall be considered as a purchase of new assets in order to promote technology driven start-ups.

2.   Tax exemption to start ups for 3 Years :-  An objective behind exempting tax for three years is to promote the growth of start-ups and address working capital requirements . As we all know innovation is the essence of every start-up. Young minds kindle new ideas everyday to think beyond conventional strategies of the running corporate world. In the initial years, budding an entrepreneurs struggle to evaluate the feasibility of their business ideas. Significant capital investment is made in embracing ever changing technology also it contains limited alternative sources of finance available to the small and growing entrepreneurs and leading to constrained cash funds. With a view to stimulate the development of start-ups in India and provide them a competition it is imperative that the profits of start up initiatives are exempted from the income tax for a period of three years. This fiscal exemption shall facilitate the growth of business and meet the working capital requirements during the initial years of operation; this exemption shall be available subject to non distribution of dividend by the start up.

3.   Tax exemption on investment above fair market value:-  Its objective is to encourage seed capital investment in start-ups. Under this exemption there is a provision under Income Tax 1961 which says where a start up receives any consideration for issuing a shares which exceeds a fair market value of such share such excess consideration is taxable in the hands of recipient as an income from the other sources. Though in the context of start ups where an idea is conceptualization or in a development stage then it’s often difficult to determine the fair market value of such share. But in general many cases are like there where fair market is value is significantly lower than the value at which the capital investment is done and this results to the tax gets levied which is mentioned under section -56(2)(vii)(b) of the Income tax act 1961. But currently the investment by venture capital funds in start-ups are exempted from the operation of this provision and the same shall be extended to investment made by incubators in the start-ups.

CONCLUSION-

I would like to conclude my article here by mentioning that the government showing the very positive intent in the action plans. Though it is critical that the settled up a team of investors, lawyers, accountants, angels, founders who will ensure that the final policies of start-ups are flawless as possible and to maintaining the right balance between accountability, transparency and doing business. Additionally I am eager to see how the Inter Ministerial Board is being set up to give a necessary certification to the tax benefits. Finally there seems to be some dichotomy on how an amount of Rupees 250000000/- i.e. Rs. Twenty five crore is being treated.

 

BY- UTKARSH KUMAR

·          

What are the advantages of LLP over a private limited company

What are the advantages of LLP over a private limited company

In India the existence of a business operated by contract but it is governed by the principles of Company law. Even the Business also has a great impact on the global economy too. But before starting lets know a brief about LLP and Private limited company, what it actually means.

Limited Liability Partnerships (LLPs) are commercial vehicles which combine the features of partnership and company form of business .The concept of Limited Liability Partnership (LLP)  has been introduced in India by way of Limited Liability Partnership Act, 2008 (notified on 31st March 2009). Though a Limited Liability Partnership combines the advantages of both the Company and Partnership into a single form of organization. In an LLP one partner is not responsible or liable for another partner’s misconduct or negligence. In an LLP, all partners have limited liability for each individual’s protection within the partnership, similar to that of the shareholders of a limited company. However, unlike the company shareholders, the partners have the right to manage the business directly. An LLP also limits the personal liability of a partner for the errors, omissions, incompetence, or negligence of the LLP’s employees or other agents. As we all know that LLP is a separate legal entity, liable to the full extent of its assets; the liability of the partners would be limited to their agreed contribution in the LLP. Further, no partner would be liable on account of the independent or un-authorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful business decisions or misconduct. But a Private limited company are the type of company that offers limited liability, or legal protection for its shareholders but that places certain restrictions on its ownership. These restrictions are defined in the company's by laws or regulations and are meant to prevent any hostile takeover attempt.

Advantages of Limited Liability Partnership over a Private Limited Company-

There are a number of reasons why many entrepreneurs prefer to go in for a Limited Liability Partnership over a Private Limited Company. It is considered easier to set up, as a rule is comparatively hassle-free in day to day operations, has significantly lower burdensome compliance requirements and costs, and therefore many see it as advantageous to begin their organization in this manner. Let us look at some of the reasons for this choice and the LLP Advantages.

1. No requirement of minimum contribution – As against company there is a minimum capital requirement in LLP. An LLP can be formed with least possible capital. The particulars of Minimum Capital contribution are 1. Private Company – 1,00,000; 2. Public Company – 5, 00,000; no such mandatory requirement and moreover, the contribution of a partner may consist of tangible, movable or immovable or intangible property or other benefit to the LLP.

2. No limit on owners of business - An LLP requires a minimum 2 partners while there is no limit on the maximum number of partners where this is in contrast to a private limited company wherein there is a restriction of not having more than 200 members.

 

3. Lower registration cost - The cost of registering LLP is low as compared to cost of incorporating a private limited or a public limited company. An illustration can show the approximate cost involved in formation of private limited company and an LLP.

4.  No requirement of compulsory Audit - All limited companies, whether private or public, irrespective of their share capital, are required to get their accounts audited. But in case of LLP, there is no such mandatory requirement. This is perceived to be a significant compliance benefit. A Limited Liability Partnership is required to get the audit done only in the case that:-

1.   The contributions of the LLP exceeds Rs. 25 Lakhs, or

2.   The annual turnover of the LLP exceeds Rs. 40 Lakhs

     

5. Savings from lower compliance burden - Every year, there are about 8 to 10 regulatory formalities and compliances are required to be duly completed and submitted by a Private limited company whereas a Limited Liability Partnership is required to file only two, namely, the Annual Return & Statement of Accounts and Solvency.

6. Taxation Aspect on LLP - For income tax purpose, LLP is treated on a par with partnership firms. Thus, LLP is liable for payment of income tax and share of its partners in LLP is not liable to tax. Thus no dividend distribution tax is payable. Provision of ‘deemed dividend’ under income tax law, is not applicable to LLP. Section 40(b): Interest to partners, any payment of salary, bonus, commission or remuneration allowed as deduction.

7.  Dividend Distribution Tax (DDT) not applicable - In the case of a company, if the owners to withdraw profits from company, an additional tax liability in the form of DDT @ 15% (plus surcharge & education cess) is payable by company. However, no such tax is payable in the case of LLP and profits of a LLP can be easily withdrawn by the partners.

  

                                          The Limited Liability Partnership act 2008 was published in the official Gazette of India on January 2009 and has been notified with affect from 31^st March 2009.

•       In India, An LLP is treated like any other partnership firm.

•       No partner would be liable on account of the independent or unauthorized actions of other partners & there is no joint liability created by other partners.

•       LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession.

•       Indian Partnership Act, 1932 shall not be applicable to LLPs and there shall not be any upper limit on number of partners in an LLP unlike an ordinary partnership firm where the maximum number of partners can not exceed 20.

•       LLP Act makes a mandatory statement where one of the partners to the LLP should be an Indian.

•       Provisions have been made for corporate actions like mergers, amalgamations etc.

•       The Act also provides for conversion of existing partnership firm, private limited company and unlisted public company into a LLP by registering the same with the Registrar of Companies (ROC).

Conclusion

Here I would like to conclude my article by saying that there is no doubt that a LLP structure has a better tax planning options however that should not be a criteria for a start up while selecting the best legal entities.

                                                   BY,
                                                   UTKARSH KUMAR

HOW TO UNDERTAKE A PARTITION OF A FAMILY BUSINESS

In today’s era the term partition is very commonly seen in between family members which results to a division of assets in between them, some partition took when there a dispute arises among members of the family, some took because the thinking of every family members does not match for a same cause and many more causes are there which results to a partition in a family Business. In this article what is partition, its kinds, who have rights to claim a partition and under what conditions there can be a division of a family business.

The term partition used in the law of real property to describe an act by a court order or to divide a concurrent estate into separate positions representing the proportionate interest of other members of the family. A practical division of property would involve not only the fractional share of a family members is entitled to, but it also decides the exact boundaries of the property of Joint Family. As we all know that the partition is the severance of the status of the Joint Hindu Family which is known as the Hindu Undivided family mentioned under law. In the joint Hindu family the head of the family is known as KARTA he is the one, who manages day to day expenses of the family and looks after the family business. The Karta contains a limited powers but he has also a power to compromise all disputes related to family business.

In the Hindu law it is said that once the status of Hindu family is put to an end then there is notional division of properties among the members & the joint ownership of property will come to an end. For an effective partition it is not necessary to divide the properties in METES & BOUNDS. Here the determination of metes & bounds can be done through mutual agreement or the court will appoint a commissioner to do the same. There are 2 types of partition which are described under Hindu Law they are as follows:-

1.   Total Partition

2.   Partial Partition

                               In the total partition the whole property of a Hindu Undivided Family undergoes in a total division of property & the same will be divided in between all the coparceners and family cease to exist as a Hindu Undivided Family, where as the partial partition can also be made when some of the members go out on partition & other members continue as being a member of the family & in this case the remaining property will belong to the undivided family.

Now it is very necessary to know that who have a right to claim a Partition in a family business, so in this regards I am spreading a light on it, in any family where a disputes arises and which results to a partition in a Family Business there any coparcener has a right to claim a partition in a Family business and it is not mandatory also that other coparceners should agree to the partition which was sought by one of the coparceners. Even minors can also claim for a partition in the family business & the claim can be made through their guardian until the minor reaches in his age of majority.

                                The partition in a family business on the death of the coparcener but it cannot bring an automatic partition and on such death the other living members would continue to remain as joint.  But in the Hindu Succession Act there is a provision which says that there is a deemed partition for a limited purpose of determining the share of the deceased coparcener for the purpose of succession mentioned in the act of 1956, HINDU SUCCESSION ACT. The another clause which also arise here is the ownership of the property received by a member on a total partition of Hindu undivided family , here the property which will be received by the male member of the family on the total property will retain its character as a joint family property and if he is single then it will be Hindu undivided family property after the marriage and a Sole member has a right to constitute a hindu undivided family on marriage . Any member can demand for the partition in the family business by entering into the DEED OF PARTITION, here parties are considered purely as a contractual in nature but the parties have to file a suit in a Civil Court for a decree of partition, the decree is registered with the Sub-Registrar of Assurance mentioned under the  INDIAN REGISTRATION ACT and after the successful registration it can obtains the loans in future as the financial institutions  would accompany you more comfortably & accepting to the property as a security if there a court decree lies which opposed to the mere contract in between the family. One thing to be kept in mind always is validity of partition between the widow mother and sole surviving coparcener son here a mother or a wife has no right to claim for a partition but if the partition is affected then a mother or a wife will get an equal share as of the son, there is also a clause where a property is capable of physical division when the partition was made by the physical division only, if the property of Hindu undivided family does not admit the physical division. For instance it was never expected that the utility of the property is lost by compelling the physical partition and in such case the property will be partitioned to its extent possible manner. In general the partition can be made orally also and there is no provision in law that the said partition must be evidenced by a written agreement only, although the partition of the immovable property of the Hindu undivided family can be made through an oral agreement as well.

                               A business cannot be partitioned by metes and bounds in case of partition for conversion of family business into partnership , it may however noted that a partition can be effected orally and the claim will not be upheld and the income generated from the business will be held assessable in the hands of Hindu undivided family itself. The validity of penalty on Hindu undivided family after a total partition gives the mandate to an assessing officer to levy penalty on Hindu undivided family provided under Section-171(8) of Income tax act. The procedure by which the partition gets its recognition are as follows:-

1.   The Hindu undivided family which has been here to assessed must make a claim to the Assessing officer that the Hindu undivided family property are subjected to the total partition.

2.   Then Assessing Officer will make an inquiry to the claim.

3.   Then the Assessing officer will issue a notice to all the members of Hindu Undivided Family.

4.   If he is satisfied that the claim is correct then he will record a finding that there was a Total Partition of the Hindu undivided family and he will also mention the date when it took place.

                                                   Let me now share my views on the Deed of Partition and what role it Play during the Partition; Deed of partition is a deed by which lands held in common, coparcener, or joint tenancy are separated into different portions and distributed among several members who takes them in severalty, and if the deed of partition is executed then there will not be any difficulty with respect to the rights of the parties under deed and with the respect to the principles of law applied in the case. The original Deed of partition will always remain in the custody of 1^st party and the duplicate copy of deed will be in the custody of other party.

Conclusion:-

In India the existence of a family business does not operated by contract but it is governed by the principles of Hindu law. As family business do not have any written partnership agreement or they doesn’t have any certificate of incorporation of company. Even the family Business also have a great impact on the global economy too. In general its really easy to carry out a business in association with the family members but when the breakage occurs in the bond of family members then a partition among them takes place, as I have mentioned above any coparcener can claim for a partition in the family business and the partition can be carried out by the Deed of partition. The assessing officer plays a vital role when a total partition is claimed by the Hindu undivided family, he will make an inquiry on the given claim and after issuing a notice to all the members of Hindu undivided family and if he is satisfied with the claim which seems to be correct then he will record the finding that there was a total partition claimed by the Hindu undivided family and he will record the date also when it took place.

                                                  

                                               BY,

                                               UTKARSH KUMAR