Proprietorship to Partnership

INTRODUCTION

A sole proprietorship is a business which is owned and managed by an individual. On the other hand, a partnership form of business is one which involves two or more persons working together, towards a common objective.

PROCESS

1. Draft Partnership Deed: Partnership deed is the sole and the most important document in a partnership firm. It governs all provisions, terms and conditions. It should mention about the partners, their shares, the business activity, the remuneration of partners, their roles etc.
2. Declaration of Transfer: apart from the basic structure of the deed, it should also mention about the previous proprietorship business and make several references which would be essential and connected to the transfer. Such things may include, pending accounts, GST registration details, etc.
3. Execution: It should mention the date on which the transfer would come to effect
4. Registration: though registration is not mandatory, it is highly recommended. Registration will enable the partnership firm to file suits and the partners to file suit against other partners. In order to register, the deed has to be signed by every partner on stamp paper and submitted to the Registrar of Firms (RoF)

ADVANTAGES / FEATURES

1. It will allow more people to manage the business
2. It will bring diversity in the organization
3. It will allow for further expansion, owing to increased capital

DOCUMENTS REQUIRED

1. Identification proof of partners
2. Address proof of partners
3. Sole proprietorship incorporation documents
4. GST registration details
5. Other documents associated with sole proprietorship

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