partnership firm to pvt ltd company

Overview

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.

It has always been more advantageous to incorporate a company over a partnership firm. The members of the company enjoy the advantage of limited liability and perpetual succession. Section 366 of the Companies Act, 2013 deals with the entities capable of being registered under the Act. According to this section a co-operative society, an LLP, partnership firm, society or any other form of business entity formed under any other shall be converted into a company.

The major benefit of registering a Private Limited Company is that it has the status of a separate legal entity that a Partnership firm does not have. Private Limited Company Has Limited Liability whereas in the case of partnership firm partners are personally liable for each and every debt. Private Limited structure is more transparent than other business structures. PLC has its own advantages such as Limited Liability, Perpetual Succession, easy access to funds, etc.

Documents required

• For DIN – PAN card/Aadhaar card/Passport image’s signed copies
• A newspaper advertisement in the form of URC-2
• Details necessary for submission of form URC-1
• Partnership firm/registration’s name (if any).
•  
• SRN of RUN (submitted form).
• Number of partners.
• Date of partnership deed.
• Date of partner’s resolution.
• Total amount of property – secured debt (if any).

Process

1. Convene a meeting for the Conversion of Partnership Firm Into Private Limited Company
2. Apply for DSC and DIN for all directors and shareholders of the company.
3. Obtain name Approval in RUN
4. File Form URC-1 along with the necessary attachments with ROC
5. Publish an advertisement in Two Newspaper
6. Draft MOA and AOA
7. File necessary forms with ROC

Benefits

• Limited liability of directors
• Easy access to funds 
• Transferability of shares 
• No capital gain tax on transfer of property from partnership firm to Private Limited Company
• No stamp duty on transfer of property from partnership firm to Private Limited Company

Services we provide

• Filing of e-forms and applications.
• PAN Application (If proprietor PAN isn’t available)
• Registration under Shop & Establishment Act.
• Registration under GST Act.
• Government Fees, Stamp Duty, and its Notarization.
• Advisory on other applicable government registrations  

Requirements

• Registered Partnership firm with seven minimum Partners
• Minimum 2 Directors for conversion to Private Limited Company
• The directors and shareholders can be the same person
• DIN (Director Identification Number) is mandatory for all the Directors
• DSC (Digital Signature Certificate) is mandatory for two of the Directors