• Registered Users :
  • 160985
  • Current Active Users :
  • 102220

Your Answer

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