Properitor to partnership clarification


Background:

22 years back my father started a construction company with my brother as a proprietor. From then on the property was registered as P.O.A  in my name and Builder as my brother. All the sale is done thru a sale cum construction agreement for the projects done so far.

Question

Can anyone let me know whether i can convert the current properitor company which is in my brother name into a partnership concern without changing the bank current account number?

 
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Retainer

Your father started company with your brother - what does it mean?  Is it not a Partnership?  OR your father is the sole proprietor of the said concern. (If so, your brother is not having any right over the concern).

Any proprietory concern is nothing but a personal business of an individual.  He can always call for another person to join and convert the same into a Partnership Business.  

Better check with the concerned Bank, if they can change the name of the account from your father's name to Firm's name upon producing Partnerhsip Deed with Registration Certificate, and new specimen cards of all the Partners.

 
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Thanks for the Reply.

But the thing is, after my fathers death, still my brother is carrying it  as proprietor and me as the P.O.A.  We want to carry the business after converting the existing proprietorship firm to partnership firm without changing the existing firm Name and Existing Current A/C Number.

Can you tell me weather it is possible to do it?

 
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Retainer

It means your brother is the sole proprietory.  He can always take you as a Partner and form a new firm under the same name as existing at present.  Deed of Partnership will have to be drawn and firm to be registered with Registrar of Firms.  To my knwledge bank account can continue but name to be changed by producing Deed of Partnership and REgistration Certificate.  However, confirm with the concerned bank.

 
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we do not want a new partnership firm to be formed newly. we want the existing proprietor ship firm to be converted as partnership frim so that the capital that is developed for the past 15 years to be shared by both of us. The Auditor is replying me that the existing proprietorship firm cannot be converted into partnership firm without sacrificing or dissolving the capital build in the proprietorship balance sheet.

 
Reply   
 
Retainer

You may call in as conversion.  But it is formation of a new Partnership Firm by executing Deed of Partnership and registring the same with Registrar of Partnerships.  The build-up capital as per balance sheet of proprietory concern can be taken as share capital of the presetly existing proprietor and you can join the firm with additional capital.  Proper person for you to consult is a Chartered Accountant and not a lawyer.

 
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