Partnership reconstitution
This query is : Resolved
Quick Summary
SAI SATYADEV
(Querist)
29 May 2024
Hi there,
Can a partner retire and a new partner be added simultaneously in a registered partnership firm having 2 partners. If so, what is the procedure?
Can a partner retire and a new partner be added simultaneously in a registered partnership firm having 2 partners. If so, what is the procedure?
Jaspal Singh
(Expert)
29 May 2024
just make reconstitution deed
13 August 2025
Procedure for Reconstitution (Simultaneous Retirement & Admission):
Convene a meeting of the existing partners.
Document the decision to retire one partner and admit a new one.
Prepare a new partnership agreement.
Draft the Reconstitution Deed
This deed should include:
Date of retirement of the outgoing partner.
Admission date of the new partner.
New profit-sharing ratio.
Settlement of the retiring partner’s capital.
Continuation of business by remaining and incoming partners.
Update Registration with Registrar of Firms (if the firm is registered):
File Form V (change in constitution of firm) under the Indian Partnership Act.
Attach:
Copy of the reconstitution deed.
Consent of the retiring partner.
Admission details of the new partner.
Fees as per state-specific rules.
Update PAN, GST, Bank, and Other Registrations:
Inform the PAN authority (via NSDL/UTIITSL).
Update GST registration (online via GST portal).
Update the firm’s bank account with the new deed and KYC documents.
Modify any licenses held by the firm.
Retiring Partner’s Settlement:
Settle dues, capital balance, and share of goodwill (if any).
Get a No Due Certificate signed by the retiring partner.
Convene a meeting of the existing partners.
Document the decision to retire one partner and admit a new one.
Prepare a new partnership agreement.
Draft the Reconstitution Deed
This deed should include:
Date of retirement of the outgoing partner.
Admission date of the new partner.
New profit-sharing ratio.
Settlement of the retiring partner’s capital.
Continuation of business by remaining and incoming partners.
Update Registration with Registrar of Firms (if the firm is registered):
File Form V (change in constitution of firm) under the Indian Partnership Act.
Attach:
Copy of the reconstitution deed.
Consent of the retiring partner.
Admission details of the new partner.
Fees as per state-specific rules.
Update PAN, GST, Bank, and Other Registrations:
Inform the PAN authority (via NSDL/UTIITSL).
Update GST registration (online via GST portal).
Update the firm’s bank account with the new deed and KYC documents.
Modify any licenses held by the firm.
Retiring Partner’s Settlement:
Settle dues, capital balance, and share of goodwill (if any).
Get a No Due Certificate signed by the retiring partner.
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