Dissolve partnership

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

12 May 2012

author : Break Water
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Posted about 9 hours ago
Hi,

We have started the partnership firm (including me and other one) in 2010 and did the below process as of now.

1. We have prepared the partnership contract details on stamp paper and for the same we did the notary (included our firm's name).

2. Registered our firms name and address with local town’s municipality.

3. Procured the CST/GST number on basis of above document.

4. Procured PAN number of our firm.

5. Opened current account with nationalized bank of our firm.

As my other partner is not doing much activity so I want to remove him and include other but I want to keep the firm name same as it is as well as CST/GST number, PAN Number and bank account.

For your information, we have not registered the partnership firm with registrar office and with district industrial center (as SME or SSI unit). But now we are looking for those processes also.

Currently the firm is not started full fledged.

Your advice would be much appreciated.

Thanks.

Prakash Kochar

Prakash Kochar (Expert)
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13 May 2012 Add one or more partner in addition to present (2) partners by way of change in constitution, then again reconstitute the firm for withdrawal of inactive partner. Inform the changes to related Departments, as per provisions applicable.
If there are only two partners and one retires firm will stand dissolved.
Regarding registration of firm the provisions differs state wise.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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13 May 2012 Mr Author,
If there are only two partners an one is asked toretire then the status of the firm will change from partnership into proprietorship. Then you will have to apply for registration again by cancelling/surrendering th old RC under VAT and cST Acts....MJK

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Querist : Anonymous

Querist : Anonymous (Querist)

15 May 2012 Thanks all of you for your valuable advice.

I had talk with my current partner and he is ready to leave. So now here, what process I need to do to remove him and include other two as partner.

As mentioned earlier that, I want to keep all the existing procured PAN, VAT, firm name and website.

Is it mandatory to register partnership firm with regional registrar. If yes, then what are the benefits for the same.

Prakash Kochar

Prakash Kochar (Expert)
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15 May 2012 1. Add two new partners by executing partnership deed (reconstitution)
2. Reconstitution deed for withdrawal of your current partner.
3.Intimate the changes to all the concerned departments.
CST, GST and PAN No. will not change.
registration under Indian Partnership Act is necessary for Civil court matter.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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15 May 2012 Mr Author,
You have to file registration application form again,with photos of new partners,their address,signature etc.
MJK

Prakash Kochar

Prakash Kochar (Expert)
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17 May 2012 Provisions may be different in different states. In Maharashtra You have to intimate the changes u/s. 18 to Sales Tax dept. No need to submit application for fresh registration or photo incoming partners.

Querist : Anonymous

Querist : Anonymous (Querist)

17 May 2012 Many thanks all experts for your advice.

For your information, we have not registered the partnership firm with registrar office and with district industrial center (as SME or SSI unit).

So now what I understand for your advise is that I have to follow below steps.

1. Prepare a legal document which includes removing the current partner (it is not registered with registrar).
2. Prepare a legal document which includes adding new two partner.
3. Register the partnership firm with registrar.
4. Inform to PAN and VAT departments including Bank regarding the same.

Please correct if I am going in different direction.

Thanks.

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Prakash Kochar

Prakash Kochar (Expert)
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17 May 2012 First add the new partners and in second step remove the old existing partner. Provisions and procedures in different states are different.

Querist : Anonymous

Querist : Anonymous (Querist)

18 May 2012 Many thanks all experts.