Formation of more than one partnership

[KJ NARAYANAN]

Whether the partners of an existing firm 'A' can form another partnership 'B' with or without any change in the objects?. The partners of 'A' and 'B' are the same. Is there any court decision accepting such formation?

[CAGOPALJI AGRAWAL]

Unless it is with some ulterior motive to escape the various exemption limits in taxation like excise/service tax, I don;t feel any other hardships.

AI Summary

Formation of multiple partnerships permitted where partners are identical, but subject to scrutiny for tax-evasion motives. Formation of a new firm by the same partners with similar objects is generally permissible, but may attract scrutiny and regulatory consequences if undertaken with an ulterior motive to evade tax exemption limits such as excise or service tax; absent such motive there is no inherent legal hardship in creating another partnership.