How to Dissolve the Partnership Firm Permanently?

Yes you need to get signed a dissolution deed by all the partners and yes notry is must........

Further i think you need to surrender your firm's PAN with A.O alongwith a copy of dissolution deed....

Thanks for the reply dear, but i want to enquire one thing more.

That was i have already told you to that the Partnership Firm will be dissolved and 1 partner wants that the business will be continued in Proprietorship. Actually partners are the real family members. In order to avoid heavy tax @ 30% on Partnership they want to continue the business under proprietorship.

As they will start the business under Proprietorship w.e.f 01.04.2011 and accordingly the books will be maintained.

My main question is that when the opening entry will be passed along with capital than how to value the Assets. As i have told that it's a Computer Institue and their main assets are Furniture, Computer, Air Conditioner & Alluminium Fittings. How to value these in opening entries. What will be the amount taken and on what basis.

plz.. help

You shall value the assets on FAIR VALUE BASIS on dissolution....

(simply you can say the written down value as on 31-3-11 in firm's book is fair value as on 01--4-11..)

so transfer the assets on same value at which they are in books.

And you can refer section 45 of income tax act for tax purpose....Which says that FMV of the assets will be deemed as sale consideration and accordingly in your case (as i said WDV=FMV) there will be NO TAX.

Further about capital, the partner going to continue the business will pay other partners share and show it as his capital introduction.

I agreed with you. But i am in little bit different situation. Kindly resolve the current situation which i am going to present you.  

Mr. A is doing a business under proprietorship and he is not maintaining any Books of Accounts. But lateron after some years has been past, he wants to maintain his books w.e.f. 1st April. He has some assets and as when he will start maintaining books it needs to pass the opening entry and consequently the values of the assets will be entered.

Than is it possible that assets can be valued at FMV (Fair Market Value) and if we do so than is there any need to have some documentary proof so that if any Tax official ask that how the assets was valued and what was the authenticity.

FMV is decided by the Proprietor himself or by anybody else.

If it's a registered firm then you need to do the following

1. write a dissolution deed

2. give paper advertisement in minimum two local news papers

3. get it published in the official gazette

4.submit all these along with nil balance sheet to the registrar of firms

in case of two partners in which one of them carry business in proprietorship then what we done???

I have dissolved the partnership. How can I send intimation to Income tax department. Is ther any form to inform the same.

Venkitachalam 

I have dissolved the partnership. How can I send intimation to Income tax department. Is ther any form to inform the same.

Venkitachalam 

my partnership firm was not registerd 

we got a pan of partnership 

we never reached the eligible criteria to pay service tax . 

the one partner resigned on a bond paper as he had to rush out of india to get a job.

do i need to do any thing . i just dont wanna run that account any more.