Transfiguration of sole proprietorship business in a general partnership

Piece of legislation, which dealt with issues of transition were a code of commercial companies. This act does not apply to a single transformation of the company. Conversion of sole proprietorship business is often the economic transformation, and having its origin in the provisions of the Civil Code, and is based on transactions involving the company. There are three methods of economic transformation: 1st liquidation of economic activity and the subsequent use of the thus obtained funds to create a general partnership or join an existing general partnership; 2nd making sales to the existing general partnership led by the company itself and then join this company as a partner; 3rd make the lodge - in-kind - companies to partnership. Single operator effecting the transformation of carrying on its business in a public company must make a number of steps and fulfill obligations under the tax laws and the conduct of companies and businesses.

Liquidation of their business
Liquidation of business involves the completion of formalities by the entrepreneur of the following:
- Deletion of business records
- Notification to the tax office after the cessation of business
- Pay tax on the liquidation of business
- Draw up a census of the goods at the cessation of taxable transactions
- Removal from the register of the statistical office
- Deregister from the Social Insurance

Establishment of a general partnership
The measures obtained from the defunct business was an entrepreneur can be used to establish a general partnership or join an existing partnership. In the case of setting up a general partnership should be the following: make a deal the company, pay tax on civil law, report the company to the register of entrepreneurs. The above method has a significant transformation of the tax burden, it is difficult to perform and lasts dugi time.

Sales business to a general partnership
Sales of the company must be in the form of a contract with a notary certified signatures. However, if part of the company shall enter the property, the sale must be notarized. Then the entrepreneur who has sold its business, may join as a partner into an existing general partnership, bringing the contribution of cash from the sale of the company. Joining the company makes it necessary to amend the articles of association, and the inclusion of amendments to the national registry of the court. This method of transformation has serious weaknesses, there is a significant commitment to income tax on individuals.

Bringing businesses kind to a general partnership
Last of the methods of economic transformation is characterized by the fact that the entrepreneur joins the existing general partnership or other person assumes such a company, making a contribution in kind by way of business. This means that the entrepreneur will continue to conduct business, but in a modified form of legal entity, as a joint venturer. The consequence of this construction is the need to amend the articles of association, and the inclusion of these amendments to the national registry of the court. The act of bringing the company as a contribution to a company not subject to VAT. General partnership to which the entrepreneur has made a contribution to cover the shares in the form of his company, enters under the law with all required by the provisions of tax law the same rights and obligations of the entrepreneur. Subsequently, should be eliminated by a single entrepreneur led business.


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