Benefits of converting Proprietorship to Partnership
Shared Responsibilities
The word partnership itself defines the formation of the business by combining two or more individuals there with called as partners for the business. Therefore partners share the responsibility to work and manage the business together. They can divide duties and responsibilities to one or more partners by mentioning the same in the Partnership Deed.
Show MoreShared Returns & Liabilities
By converting a Proprietorship business in to Partnership, the accumulated loss and unabsorbed depreciation of proprietorship adjusted as loss/depreciation of the successor partnership firm. There for all the assets and liabilities of the proprietorship firm turns to the same of the newly formed partnership firm immediately after the formation.
Show MoreFlexibility in Operations
As the partnership firm is incorporated on the basis of Partnership Deed executed by the partners, they can decide how to operate the business with mutual consent. Partnership Deed can be changed according to the requirements from time to time even after the registration of the partnership. There are no limitations on partners in regards to running the business, as long as it is covered under the signed agreement.
Show MoreYou can pre-define Objective or Time line
While forming a partnership firm, the partnership deed enumerates pre-defined business objectives and activities, which are the main objective to commence business. A partnership can be formed for a particular time period or to complete a specific project or for a particular objective and once the same is completed the partnership will automatically dissolved. Otherwise, it can be continued as long as the partners ‘WILL’.
Show MoreConvert Proprietorship to Partnership Online
Documents Required for Converting a Proprietorship to Partnership Firm
- PAN Card A self attested copy of PAN Card of all the partners.
- Aadhar Card A self attested copy of Aadhar Card of all the partners.
- Address Proof Voters ID/Passport/Driving License/ Any other valid address proof by state/central governments.
- Business Address Proof Electricity/ Telephone bill of the registered office address
- Rent Agreement Rent agreement and NOC from owner of the place of business, if rented.
- Details about the Proprietorship Business Details of registrations in case anything like GST Registration or any other kinds of registrations acquired from Government departments need to be submitted for change of status of business
- Statement of Assets and Liabilities Statement of Assets and Liabilities certified by a Charted Accountant
Register Online
Convert Proprietorship to Partnership in 3 Easy Steps
- Fill up the Registration Form
Select any Package suits your requirements
Fill up the form which will take less than 10 minutes
Make payment through secured payment gateway.
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Provide details & upload documents required for registration
Drafting a partnership deed
Sending for confirmation
If there is no corrections/changes, take print out on Stamp paper of prescribed value and send scanned copy of it back duly signed by all the partners.
- On receipt of signed partnership deed Application for PAN will be processed (will take 7 to 14 working days)
Application for TAN
Get your Partnership firm registered.
All these take 15 Working Days*.
*Subject to government processing time.
The Process to Convert a Proprietorship to Partnership
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Day 1
Collection of Information
Discussion and Collection of required documents
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Day 2 – 3
Verification of information and documents provided
Drafting of Partnership Deed
Review and confirmation from partners
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Day 4 – 5
Payment of Stamp Duty for Partnership Deed
Notarization of Partnership Deed
Application for allocation of PAN and TAN
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Day 6 – 15
Registration of Partnership Deed, if subscribed
Certificate of Registration from Registrar of Firms*
*Subjected to Government Processing Time
Enquiry
FAQ
Whether partnership deed registration is compulsory?
Partnership deed registration is not compulsory as the partnership act validates for both registered and unregistered partnerships but anyhow it’s better to register the deed to get it more comfortable law back up.
Can a Partnership firm get registered under MSME Act?
Yes. You can register your partnership firm under MSME Act.
What is the minimum capital to start a Partnership Firm?
There is no particular law to restrict the amount of capital. As per the requirement the partners can finalize an amount, which would be sufficient to incorporate and run the business. Partners can contribute in terms of cash, premises, or intangible property like goodwill, intellectual property etc. Partners can introduce capital in equal ratio or uneven ratio.
Under which government authority, the application for registering a partnership is submitted?
The application for registration of a partnership firm in India is submitted with the Registrar of Forms (RoF) under whose jurisdiction the place of business falls.
What are the advantages of a registered partnership firm?
Only a registered partnership firm can file a suit in any court of law against the firm or other partners for the enforcement of any right arising from a contract or right conferred by the partnership act. A registered partnership firm only can claim mutual adjustment of debts owned by disputant parties to one other or other proceedings in a dispute with a third party. Hence it is advisable for a partnership firm to get registered sooner or later. An unregistered partnership firm can get registered at any point of time after its incorporation.
How many people required registering a partnership firm? Is there any special requirement to become a partner?
For forming a partnership entity you need minimum 2 persons joins by agreeing a mutual contract called Partnership Deed. The partners introduced in a partnership business must be permanent resident and citizen. Non Resident Indian (NRI) or person of Indian Origin (POI) can join the partnership with the prior approval from India Government. The partners must be competent to the contract and should not be a minor. A minor can be nominated to a partnership business to profit sharing.
What are the draw backs of anon registered partnership?
A non-registered firm can’t file suit against any partner or third party. However the third parties can file a suit against the unregistered partnership firm to enforce their dues or claims. Non registration only denies the rights of the firm and its partners but not of the third parties.
What are the main points that should have to be there in a partnership deed?
The partnership deed should specify the objective and activities of the business and clauses related to capital contribution, profit sharing ration of the partners, Management and administration of the partnership firm etc. The signed partnership deed shall be duly stamped and notarized.
What is the amount of stamp duty payable on partnership deed?
To confirm the validity of the partnership deed, the partners must pay stamp duty required as per the capital of the firm. The rate of duty is prescribed under state stamp act which is differ from one state to other.
When can a partnership firm apply for PAN Card?
Applying for PAN only possible after execution of Partnership Deed and it’s registration with concerned Registry of Firms(RoF). The physical copy of PAN will be received at the registered business address.
How long it take to register a partnership firm in India?
The registration of partnership firm in India can take 12 to 14 working days. However the issue of registration certificate can take place as per the regulations of the concerned states.
What are the compliance requirements for partnership firm?
The partnership firm shall maintain the Book of Accounts and Financial statement. The income tax returns should be filed for the respective financial year before the due date. GST Registration requires if the annual returns of the company exceed the limit for which exemption allotted