Question ID :
41101
CA Firm Conversion— Partnership Firm to Sole proprietor
Dear All,
Very Happy Morning.
Myself, Vamsi Krishna Ryali, Partner at "Anil and Vamsi Chartered Accountants". We are Two Partners in our Firm. Due to unavoidable situations, my partner wants to move out of the Firm. My unresolved doubts in this regard are as follows:—
1) If my partner Retires from the Firm, Firm will get dissolved since number of partners falls below Two, in such cases, can i convert this Partnership Firm into Sole Proprietorship ?
2) Can i Continue with Existing Trade Name and Existing Firm Registration number of ICAI ?
3) Shall Partnership Firm Experience will be added to Sole proprietorship for Bank Empanelment Purposes ?
Thank You for your valuable time.
Posted by
RYALI VAMSI KRISHNA
on
Jul 17, 2021
Filed Under
MISC.
Answer ID :
81196
1) If my partner Retires from the Firm, Firm will get dissolved since number of partners falls below Two, in such cases, can i convert this Partnership Firm into Sole Proprietorship ?
Reply:
There is no need of dissolution. It will automatically convert in a proprietorship firm as soon as your partner resigns. Definitely do settlement of the assets and liability of the firm for accounting purposes.
2) Can i Continue with Existing Trade Name and Existing Firm Registration number of ICAI ?
Reply: Yes.
3) Shall Partnership Firm Experience will be added to Sole proprietorship for Bank Empanelment Purposes ?
Reply: Yes.
Posted by
CA. JHA SHANKAR KUMAR on
Jul 17, 2021
Answer ID :
81198
Here, I do agree with Mr. Jha that dissolution is not required and partnership firm will automatically convert into proprietorship.
However, I recommend to prepare dissolution deed which in turn help you in closing of bank account in the name of Partnership firm, surrendering of PAN card in the name of Partnership firm and also renewal of trade license (State Govt. requirement if any) in proprietorship profession.
Posted by
CA. KHARA VIKASH on
Jul 18, 2021
Answer ID :
81199
Yes. Partnership firm will be converted to sole proprietorship firm. It can be continued with existing trade name and with existing registration number. Only you have to intimate to ICAI about retirement of partner from the firm. If the existing trade name is continued, experience will be added in sole proprietorship firm for bank audit empanelment.
Posted by
CA. chunauti dholakia on
Jul 19, 2021
Answer ID :
81202
Dissolution deed is to be prepared, scanned and uploaded in SSP. Then only the retirement of the partner from your firm will be updated in the Institute's records.
Posted by
Y.KANAKAMAHALAKSHMI on
Jul 20, 2021