Proprietory firm to partnership or pvt. ltd. co.

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This query is : Resolved

Rajeev Gupta (Querist)

06 October 2013 Dear Sir,

We are based in Jamshedpur, Jharkhand. Ours is propritorship firm and my father was a proprietor. He died in the month of February 2013. Till now we have not changed the functioning of firm on paper.There are also tax liabilities pending for the F.Y. 2012-13. The turnover of the firm is 1 crore (approx.). Please suggest the procedure to convert this firm from proprietory to partnership or pvt. ltd. concern. Also what factors should be considered to convert proprietorship firm to a partnership firm or a pvt, ltd. co.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)

09 October 2013 A Proprietorship concern can be converted into the a partnership following the below procedure:

1) Minimum 2 members(partners) to be there to form a partnership

2) By mutual understandings of the partners a deed as to be prepared as per Indian Partnership Act, 1932

3) The partership can be registered under the Indian Partnership Act, 1932

4) If your proprietory concern is registered under various act(s) like Sales Tax, Service Tax or other, then concerned forms to be submitted accordingly to change the status of your firm/business.

5) A seperate PAN has be obtained by the Income Tax Department and accordingly the IT Returns has be to filed. And after conversion to partnership the assets & liabilities of the firm of proprietory concern can be transferred to the firm's name.

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