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You continue to operate your sole proprietorship by yourself but you want to convert to a...

You continue to operate your sole proprietorship by yourself but you want to convert to a partnership because your accountant wants you to file a form 1065. What are you missing that prohibits you from forming a partnership?

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Answer: One major reason why a person forms sole proprietorship is because of the control that it offers. This is one major reason that prohibits an entrepreneur from forming a partnership firm in which the decision making, profits and control gets shared.   For converting a sole proprietorship to a partnership firm, the owner will need to first draft an agreement with another party and sort out the terms and conditions of operations. Additional paper work needs to be carried out and a number of aspects need to be looked into like the share of each partner and so on. Therefore if someone wants to convert sole proprietorship into partnership it is mainly the control over the business that prohibits him from doing so.

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