Conversion of prop to a partnership.

This query is : Resolved

Ram (Querist)
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31 October 2013 i want to convert my prop business to simple partnership business not LLP. what is the procedure.... what should i take care in income tax and service tax point.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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31 October 2013 actually there is method. Draw a partnership deed with your partner. If you have any business assets that you are going to use for partnership, then record those assets in partnership accounts on the asset size and credit the equivalent amount to your capital account.

Apply for a new PAN, and service tax number for the partnership firm. Please note that partnership shall be a separate entity and shall be taxed separately. You still need to file separate income tax return. In case you won't be doing any business in your own name, you can surrender you Service tax registration.