Changing from sole proprietor to partnership

My husband was a sole proprietor until last month when we switched to a general partnership under a new company name. He is a contractor and still has payments being received under his old company name due to holdbacks which will require us to use the old company name on accounts for another month or so. Do I need to open a brand new company under the new partnership name or can I just change the company name/GST number and amend the accounts to reflect the new partnership?

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    Hi Danielle,

    It is my understanding that yes, you need to open a new and separate set of books for each business, and no, you cannot just change the company name and GST number. Each business (number) will have associated with it, its own revenues, expenses, assets, liabilities, taxes, etc. for reporting purposes. Mixing the two would make it nearly impossible to tease apart which numbers belong to which company.

    I believe on CRA's website there is a form, "RC145 Request to Close Business Number Program Accounts" to wind down a business number when your husband is ready to close the books on his sole proprietorship. I can't answer 'when' the best time to do that, is... I'd suggest a discussion with an accountant would be instructive here as they would be able to advise on things like perhaps the sole proprietorship might sell some of it's assets to the newly formed, general partnership.

    See http://www.cra-arc.gc.ca/E/pbg/tf/rc145/

    Kristine