Partnership to proprietorship conversion

You can continue with the same name. But distribute all assets & liabilities, profit or loss to the outgoing partner. You can join new partner in the same place with new partnership agreement and the same can be submitted with the registrar of firms for the change of partner intimation.

Under Section 59 of the Act, when the Registrar of Firms is satisfied that the provisions of section 58 have been duly complied with, he shall record an entry of the statement in the Register of Firms and issue a Certificate of Registration.

But During the course of the business, some situation may arise like:

1. The Place of business may change
2. The Partners may decide to change the name of the Firm
3. There may be admission of new partners in the Firm
4. The old partners may resign or leave from the Firm
5. There may be change in the name and permanent address of the partners
6. The minor Partner entered at time of constitution of firm may get the majority etc.

So, in all above such cases, the Partners are bound to inform the Registrar of Firms about such changes in the Partnership Firm. Consequent to which they are to draft a new Partnership Deed as per the changes and to file again the application along with required documents to the Registrar of Firms with the applicable fees.

Change in the constitution of the firm and its dissolution [Section 63(1)]

When change occurs in the constitution of the firm, any of the new, continuing or the outgoing partner, while when a registered firm is dissolved, any person who was a partner immediately before the dissolution or the agent of any such partner or person specially authorized on his behalf, may give notice of such a change to the Registrar, specifying the date thereof.

 Procedure for Changes in the Constitution of the Firm:

1. Draft a new Partnership Deed as per the changes in the constitution of the Firm
2. Fill Form in Capital Letters in Form No. as per the requirement
3. Pay the Challan Fees with the respective Bank
4. Submit the application with the concerned Registrar of Firms of the State along with following Documents:

(i)             Xerox copy of Old Partnership Deed (Drafted at time of Constitution of Firm), duly attested by the Notary of concerned town where the Registered Office of the Firm is situated.

(ii)            Xerox copy of New Partnership Deed (Drafted at time of Changes in the Constitution of Firm), on a Stamp Paper of Rs. 1000 (Stamp Paper of Rs. 1000 as applicable as per the local State Stamp Act) duly attested by the Notary of concerned town where the Registered Office of the Firm is situated.

(iii)           ID Proofs of all the partners, along with the new admitted partners, if any, duly attested by Notary, Gudegted Officer or any Professional like CA/CS/CWA.

(iv)          Passport size photographs of all the partners along with the new admitted partners, if any.

(v)           Copy of Receipt Challan (Form PTR 16 Rule 107 of PTR Volume 1) deposited in the Bank.

(vi)          Ownership proof of the new place of business, if place of business has been changed

(vii)         The Xerox copies of Certificate A and C, issued at time of constitution of the Firm, duly attested by Notary, Gudegted Officer or any Professional like CA/CS/CWA.

Hello,

What will happen to the PAN card and Bank account of the partnership firm in case of conversion from partnership to sole proprietership?