A Partnership Cannot be Changed to a Sole Proprietorship

National Taxation Bureau of Kaohsiung, Ministry of Finance said that a citizen called to ask if a partnership can be changed to a sole proprietorship as his/her partner withdrew from the partnership.

The Bureau expressed that “Partnership is a contract whereby two or more persons agree to put contributions in common for a collective enterprise” as stated in Paragraph 1 of Article 667 of Civil Code. Therefore, a partnership requires more than two partners in order to be established and maintained in operation. If the partner(s) of a partnership withdraws from the company and only 1 partner remains, there will be deficiency in the requirements for the company to survive. Consequently, the partnership shall be dissolved; cancel its registration; and make its current final report or liquidation income report in accordance with Article 75 of Income Tax Act.

The Bureau reminded people that, if the partner(s) of a partnership profit-seeking enterprise withdraws from the partnership and only 1 partner remains, it is a must to cancel the partnership organization if the remaining partner desires to continue the business in the form of sole proprietorship. Besides, the company shall make its current final report or liquidation income report in order to end the partnership and to apply for the establishment and registration of a sole proprietorship.

Contact: Mr. Chang, Head of the forth Examination Division

TEL: 07-7256600 ext.7330