Convert Proprietorship to Partnership

Description

A proprietorship firm is run by an individual with his PAN number and GST registration in his own name. There is no specific procedure to convert the proprietorship firm into a partnership.

One has to incorporate the partnership firm and in the partnership deed, assets and liabilities of the proprietorship firm can be mentioned. Further proprietorship firms need to be dissolved by declaration. There is a specific procedure to carry on the GST input credit to a partnership firm.

Transfer of stock and other assets from proprietorship to a partnership firm is exempt from GST. However, the date of dissolution and formation of the new firm should be the same to have the continuity of filing of GST returns.