What are the tax implications of converting a partnership into a private limited company?
This article examines the conditions for exemption from capital gains, the treatment of goodwill, the carry-forward of losses, and the primary compliance actions for converting a partnership firm into a private limited company.
CORPORATE LAWS
Kaushiki agrawal
8/1/20253 min read


In India, a trademark registration confers upon the proprietor rights to its exclusive use regarding particular goods or services. However, these rights are not forever. The Trademarks Act, 1999 provides a process to cancel the trademarks on several statutory grounds, otherwise called rectification, for the purpose of ensuring that any trademark on the register is bona fide, in use, and not deceptive. Any interested person can apply for cancellation. It is an essential regulatory process aimed at protecting robust competition. In this article, we discuss the statutory provisions and grounds for cancellation, parties who may apply for cancellation, the process and documents for applying for cancellation, costs of cancellation of a trademark application, and appeal processes for reviewing a cancellation decision in India.
Legal Framework for Trademark Cancellation
In India, the cancellation and rectification of trademarks are addressed by the provisions of Sections 47, 50 and 57 of the Trademarks Act, 1999:
· Section 47 deals with cancellation on account of non-use of a trademark.
· Section 50 deals with rectification as regards certification marks.
· Section 57 deals with cancellations or rectifications more generally, including wrongful entries.
These provisions work together to balance the interests of trademark holders while limiting the potential harm to the public through misuse or monopolization of stale or deceptive marks.
Eligible Applicants for Trademark Cancellation
A party can apply for cancellation under the Act as an “aggrieved person”. An "aggrieved person" could be:
· Competitors in the market;
· Previous users of a similar mark;
· Confused consumers.
Courts have taken a broad interpretation of "aggrieved person" to encourage legitimate challenges to trademarks without inviting claims to economic compensation. In addition, the Registrar of Trademarks can act on cancellation applications suo moto after the trademark has lapsed for 10 years due to a failure to renew. The registered proprietor can make an application for cancellation under Section 58, which is often to correct a mistake or to voluntarily remove the mark.
Grounds for Seeking Cancellation
A registered trademark can be cancelled on a number of statutory grounds including:
· Non-use at all in the trade for a continuous period of five years and three months from the date of registration.
· The absence of a bona fide intent to use the trademark on filing.
· Use of misleading, confusing or generic marks which advise consumer confusion.
· Providing false information on registration.
· Breach of conditions on the register, or the likelihood of that the mark become generic over time.
The person applying for cancellation has the onus to provide credible resources to back up their claim. The court has stated so many times over that a simple allegation is not sufficient unless supported by evidence.
Procedural Steps for Trademark Cancellation
The process usually consists of the following steps:
1. Filing an application before the Registrar of Trademarks or Intellectual Property Appellant Board (IPAB) (IPAB was abolished in 2021 and its functions were conferred on High Courts);
· File Form TM-O: Sections 47 and 57;
· File Form TM-U: Section 50;
2. Providing notice to the trademark owner and any registered users;
3. Filing of counterstatements by the trademark owner;
4. Filing of evidence by both parties by way of affidavits;
5. Hearing before the Registrar or the appointed authority;
6. Final order: The authority will either allow the cancellation or refuse it.
Usually it could take between 12 to 18 months, but there are complex cases with appeals which could extend the duration to 36 months.
Documentation Requirements
A cancellation is successful based on the quality and completeness of documentation submitted. Documentation typically includes the following:
· An exhaustive statement of case explaining the applicant's interests and the basis for cancellation;
· Evidence of non-use which may include market surveys, witness affidavits, or investigatory reports;
· Evidence of confusion or deception to consumers in appropriate cases;
· Copies of original registration certificate, previous correspondence or any legal proceeding relating to the application.
The application must be filed in triplicate and any evidence must be appropriately arranged and presented plainly to support the application for cancellation.
Financial Considerations and Timeline
Even though the official filing fees may be low, hiring a lawyer can be a significant expense for many applicants, in contested cases with multiple hearings and a lot of documents, hiring a lawyer can add significant costs. Because the overall process may take two to three years, applicants should be aware that this will take time and financial resources. Employing experienced legal professionals, will increase the chances of success and manage many of the complexities of the procedural processes better.
Appeals and Judicial Review
Registrar appeals can be made within three months. The abolition of IPAB has vested its appellate jurisdiction in specified High Courts.
· Writ petitions may be filed against these orders generally:
1. Before Division Benches in Chennai, Mumbai, and Kolkata;
2. Before a single judge in Delhi.
Appeals will relate to legal errors and not fact. Therefore, it is imperative to advance a compelling legal argument with evidence at an early stage.
Conclusion
Trademark cancellation in India is a powerful enforcement tool to support brand authenticity, protect consumers against market ambiguity, and maintain fair competition. Despite several legal and procedural complexities, trademark cancellation proceedings represent an important safeguard against infringement or long-term non-use of a trademark. As rights relating to intellectual property become increasingly recognized and valued by domestic and foreign businesses, trademark cancellation will continue to be an essential tool in the growing emphasis on transparency and accountability for trademarks.