Conversion of Partnership firm into Company

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Conversion of partnership firm to private limited company

It is good practice to start of small as a partnership firm, but that does allow the business to scale up and reach maximum growth as the many of the features are missed out in a partnership firm. The features such as transfer of shares, limited liability, easy funding process etc are a major things a growing business must consider when they are exploring. Conversion of partnership firm into company is governed under the provisions of companies act, 2013. Partnership firm to private limited can be done either by making all the partners subscribers to the Memorandum of the new company or, the new company which is incorporated takes over the partnership firm.

Conversion of partnership firm into company will not attract tax implications subject to certain conditions. The foremost condition is that the firm must be a registered partnership firm, must have minimum 2 partners and all the partners must become the shareholder of the company.

At Unilex Consultants we provide you a hassle free conversion of partnership firm into private limited company which would be dealt by our professionals within a time frame. Our team takes care of the documentation and aids in provide you the realistic estimation of cost.

Advantages of of partnership firm conversion to Pvt ltd



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.



A private limited company will have more credibility and brand value in terms of the general public.



A private limited company would attract more investment and angel investors attention as a result the company would have more flow and progress.



The overall process for transferring is taxation free and can be done without any problems provided meeting the requirements.

Documentation for for converting partnership firm into company


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



Process involved in registering a Conversion of Partnership firm into Company



Obtaining DSC and name approval

1-3 Working Day



Document Review & Completion

3-4 Working Day



Document Submission

1-2 Working Day

Requirements for partnership firm to private limited

    - 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.

FAQs About partnership firm to private limited

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.
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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