The Proprietorship Firm don’t have any separate legal entity, hence all assets and liabilities belongs to the Individual who runs the Proprietorship Firm. However, if the proprietor wants to transfer the same to a partnership, then while drafting the Partnership Deed, one should be added where to mention that Partnership Firm will take over the Proprietorship Firm.
Hence as a result all the assets and liabilities of the business of proprietor as on date of formation of Partnership Firm will be transferred to Partnership Firm in manner prescribed.
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