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+91- 8422985681
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09833628008
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hr@kshitijconsultancy.com
Partnership to Private Limited Company
Conversion of Partnership firm into a Private Limited Company is a good option for anyone who wishes to expand small and medium scale enterprises to a large scale one, or for infusion of equity capital.
With the advent of companies amendment act 2017, the criteria of requiring minimum seven members for any entity to be converted into a Private Limited Company has been done with. Under the amended section 366 of the companies Act, 2013 any entity be it a LLP, partnership firm, co-operative society or any other business entity formed under any other law, with minimum two members can be registered as a Private Limited Company. Such conversion to take place is to be satisfied with other requirements such as securing approval from all partners and secured creditors for such conversion, a notice in newspaper to be issued in one English and one vernacular language seeking objections and finally followed by the incorporation process of Private Limited Company.
The alternate option available to the partners is to set up a separate Private Limited Company and then get the entire business of Partnership Firm transferred to the company through a written agreement under which the above mentioned requirements such as requirement for having minimum two partners, newspaper advertisement, etc. are not required to be satisfied but may attract stamp duty on transfer of property through takeover agreement and may vary in different states.
Procedure For Conversion Of Partnership Firm Into Private Limited Company
• MEETING OF PARTNERS
The Partners of the Partner - ship Firm shall convene a meeting and give their consent for conversion of Partnership Firm into Private Limited Company
• DIN & DSC
Obtain Director Identification Number and Acquire Digital Signature Certificate
• COMPANY NAME
Name approval has to be obtained from the Registrar of Companies by submitting an application in E·FORM INC 1.
• E-FORM URC-1
After obtaining name approval from the Registrar of Companies, applicant shall prepare and file the E-FORM URC-1 along with the required documents.
• MOA & AOA
After obtaining name approval, and approval of E-FORM URC-1 from the Registrar, the applicant is required to draft the Memorandum and Articles of Association and other relevant documents required for in-corporation.
• FILE E-FORMS
The applicant shall file various documents including MOA and AOA in respective E-forms with Registrar of Companies. The Registrar on being satisfied on compliance shall issue a Certificate of Incorporation.
Advantages of the conversion from Partnership to private limited company
Stamp duty free
As the assets are already in the part of the company’s name there is no need of paying any exemplary stamp duty for the transfer of assets.
Credibility
A private limited company will have more credibility and brand value in terms of the general public.
Investment
A private limited company would attract more investment and angel investors attention as a result the company would have more flow and progress.
Taxation
The overall process for transferring is taxation free and can be done without any problems provided meeting the requirements.
Documents For Partnership to Private Limited Company Conversion
Passport size photograph of Directors
Copy of Aadhaar Card/ Voter identity card
Copy of PAN Card of the Directors
Electricity/ Water bill (Business Place)
Landlord NOC (Format will be provided)
Service tax or sales tax number if any
Proprietorship registration certificate
Partnership deed
Call Us at : 8422985681 / 9833628008
PACKAGES
Basic
13999/-
Inclusive all taxes
Name Approval
MOA/AOA
2 DIN
2 DSC
PAN & TAN
Certificate of Incorporation
Share Certificate
Premium
16999/-
Inclusive all taxes
Name Approval
MOA/AOA
2 DIN
2 DSC
PAN & TAN
Certificate of Incorporation
Share Certificate
PAN surrender
Department follow up
Trademark filing
GST registration
Standard
15999/-
Inclusive all taxes
Name Approval
MOA/AOA
2 DIN
2 DSC
PAN & TAN
Certificate of Incorporation
Share Certificate
PAN surrender
Note:
- The above price may vary due to stamp duty in various states
- Trademark filing excludes government fees
Procedure of Partnership to Private Limited Company Conversion
Obtaining DSC and name approval
1-3 working days
Digital Signature Certificate (DSC) is required for the proposed Directors of the Private Limited Company. After getting DSC we will apply for name approval.Document Review & Completion
3-4 working days
Once the name gets approved, our team will get in touch for a unique name and along with that collect all the requisite documents in scan for the incorporation of the company through the SPICE i.e INC 32 and form URC 1 for conversion.Document Submission
1-2 working days
After the review of all the documents required, we will submit them to the MCA and once it gets approved by the ministry we will send the MOA & AOA via mail and DSC through courier.Condition For Partnership to Private Limited Company Conversion :
- All the assets and the liability of the Partnership concern relating to the business immediately before the succession become the assets and the liability of the company.
- The shareholding of the Partnership the private limited company is not less than 50% of the total voting power in the company and his shareholding continues to remain so for a time period of 5 years from the date of the succession.
- The partners of Partnership firm does not receive any benefit or consideration, directly or indirectly, in any form or manner, other than by way of allotment of shares in the company.
- The Board of Directors shall enter into an agreement with the firm for its acquisition.
- Shares have to be allotted by the Board of Directors to the partners according to the terms of agreement.
- There must be at least 7 partners and the partnership firm has to be registered.
FAQ’s About Partnership to Private Limited Company
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What are the requirements to execute a conversion?
There must be at least 7 Partner in the partnership firm.- The firm may be registered with the Registrar of Firms.
- There must be a fixed capital divided into units.
- There must be provision of converting a firm into company.
- There must be an agreement by the partners to convert the partnership to a company. This can be done by a contract in writing to this effect to which the partner’s resolution for conversion can be attached as annexure.
- Execute a settlement deed.
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What is a Private limited company ?
A private limited company is treated as a business entity dealt completely by private ownership. The provisions of company Act 2013. For the registration of a Private limited company it is mandatory to have four roles defined sorted namely 2 Directors and 2 Shareholders. It is not necessary to have four different people to be part of the establishment, a person can act as both the shareholder and one of the directors. -
What is the Memorandum of Association and the Articles of Association of a company and what is the procedure in their regard?
On receipt of the name approval letter from the ROC the MOA and the AOA are required to be drafted. The MOA states the main, ancillary / subsidiary and other objects of the proposed company. The AOA contains the rules and procedures for the routine conduct of the proposed company. It also states the authorized share capital of the proposed company and the names of its first / permanent directors. After the MOA and AOA are required to be stamped. -
Minimal Capital involved in registering as as a private limited ?
There is no Set capital required as mentioned by 2013 governmental laws, if there is a additional capital involved we can sort it out via additional stamp duty. -
How is the certificate of incorporation issued?
After all the documents are filed, the ROC calls the attorney on a specific date for scrutiny and making the corrections in the MOA and AOA filed. On complying with the same, the certificate of incorporation is granted to the attorney. -
What are the things to expect after conversion ?
- Members Count : In a private limited company there must be a minimum of 2 people involved who would be share the roles of both shareholders & directors and to a maximum of 200 members
- Liability - Legal protection for the shareholders are the main reason why businesses seek to go the private limited route.
- Middle ground - Private Limited companies provide the best of two worlds having the legal protection as well as keeping the process simpler.
- Capital Limited - The initial capital limits the shareholders with the company in terms of theoretical value of shares and any paid in return to the set company.
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