A sole proprietorship is a form of business that is owned and operated by only one single person. Insole Proprietorship, the owner has an unlimited liability, i.e. he can be made liable personally for any losses which are incurred during the course of business. The identity of the business and the owner are one, unlike in the case of a company. 

The main reason to convert a sole proprietorship into a partnership is to grow the business and join hands with other partners. This also increases the capital invested and invites new and variant ideas for the growth of the business. 

Certain key factors to keep in mind while converting the sole proprietorship into a Partnership firm are:

1. There is no prescribed procedure for a conversion like this as such, however, it is preferred that the proprietorship is dissolved through declaration. The same could also be stated in the partnership deed as a takeover. The deed may state that all the assets of the proprietorship, will now belong to the partnership firm 
2. On converting the sole proprietorship into a partnership, the partnership deed must be framed with utmost care. The deed is similar to the Memorandum of Association of a company and holds the same importance. All the clauses of the deed must be read carefully before signing it. 

The following is the process of conversion of a Sole proprietorship into a Partnership firm: 

1. There must be a partnership deed drafted. 
2. The dissolution of the sole proprietorship must be declared 
3. Certain important details must be included, such as the date of starting of the proprietorship, the name of the proprietor, VAT and tax registration, etc. 
4. The partnership deed must include the date of starting of the partnership firm and admission of the partners into the firm 
5. The investment details must also be included in order to determine how much capital has been invested and contributed by each of the partners for the firm 
6. The deed must include all changes and procedure that will occur during the process of admission of a new partner into the partnership firm 
7. Although the registration of the partnership firm is not mandatory, it is advised that the firm is registered as it gains certain legal advantages, such as it can sue any of the partners for breach of duty as well as any third party involved in a transaction with the firm. 

Once the partnership deed is drafted and registered, the sole proprietorship is deemed to be dissolved and the partnership firm comes into existence. 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.