Proprietorship to Partnership

Let’s Start The Conversation.

Required Documents

  • Identity and address proof of proprietor and new partner(s)
  • Passport-size photos of all partners
  • Existing business registration certificate (if any)
  • GST registration certificate of proprietorship (if applicable)
  • Proof of business premises (rent agreement/ownership proof)
  • Latest utility bill of office premises
  • Proposed name of partnership firm
  • Draft terms and profit-sharing ratio for the partnership deed
Advantage

CONVERSION PROCESS

Process to Convert a Proprietorship into a Partnership

01
02
03
04
FAQs

No. A new partnership firm must be created by including the proprietor as one of the partners along with additional partner(s).

Registration is optional under the Indian Partnership Act, 1932, but it is strongly recommended for legal protection and credibility.

Yes, you can use the same business name in the partnership if it is available and not trademarked by others.

You must apply for cancellation of the old proprietorship GST and apply for a new GST registration for the partnership firm.

Yes. After settling all liabilities, you must close the proprietorship account and open a new current account in the partnership firm’s name.

A minimum of two partners and a maximum of twenty partners can form a partnership firm in India.

Yes, the proprietor becomes one of the partners in the new partnership firm, along with one or more additional partners.

There is no fixed minimum capital required. Partners can decide the contribution amount mutually based on their agreement.

Yes, family members can become partners in the firm as long as they are competent to contract under Indian law.

Yes, a new PAN is mandatory for the partnership firm, as the proprietorship’s PAN cannot be used for the new entity.

The partnership firm will be taxed as a separate entity under the Income Tax Act, 1961 and must file its own tax returns annually.

Usually 10 to 15 working days, depending on the availability of documents and registration with authorities.

Yes, a registered partnership firm can be converted into an LLP later for better liability protection and legal structure.

No, you need to apply separately to transfer or reissue licenses like GST, MSME, Shops and Establishment, etc. in the new firm’s name.

Yes, partners can amend the partnership deed anytime through a supplementary deed if they mutually agree to change terms.