Shifting from Prop. firm to Partnership firm
Introduction ::: we are building contractors in Punjab and mostly build buildings for B&R, PWD Department. We dont have a licence of our own, so we do work on the name of other licensed Contractors(Mostly Father's Friends) without any formal Documentation or Formal Subletting, we take all the payments in cash and material bills are on the name of Main contractor. Therefore we have no Proofs of the works done by us.
Question ::: Now we and 1 licensed friend of ours(lets say mr. Ram) have decided to make a partnership firm with us. Now to take big Building works one must have done small works also(Formally), which Mr. Ram has done(Formally). So is there a way that the newly formed P'ship firm can start from exactly where Mr. Ram is now ? Or the P'ship firm has to start from Zero ?
Asked 2 years ago in Corporate Tax from Bathinda, Punjab
Sorry, Sir i did not understand your question. What do you mean by starting from zero?
Whenever anybody want to bid for a project let's say 10 Crore estimated value then he must show that he has done work of 8 crore(80%) in Single project in preceeding 365 days or 2 projects of 5crore(50%) or more each in preceding 365days or 3 projects of 4core(40%) or more in preceding 365 days. So this way any contractor becomes elegible for large projects(say 50crore) in a slow way. Any new contractor or firm have to start from 20lakhs. So my question is, Is there a way that the newly formed P'ship firm can start from 15 crore eleigility which Mr. Ram has now ? Or the P'ship firm has to start from 20lakhs eligibilty and wait for many years to be eligible for big projects.
And one more concern, Can you people(CAs) see my name here or i am anonymous ?
Asked 2 years ago
Firstly, you are anonymous. Secondly, this eligibility criteria is specific to the person giving the project. You have to check this with that person.
We won't be able to tell you. Sorry!
the Partnership firm need to start afresh. You can mention that the partners have experience in the said field and attach copy of the financials.
Your name is not reflected.
You can convert the proprietorship into a partnership with the same name and admit the new members as new partners.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP.