Convert Partnership to Private Limited Company

Expand your business reach with better funding , credibility and security by converting to private limited company.

Convert Partnership to Private Limited Company

Conversion of Partnership firm into Private limited co.

The major benefit of registering a private limited company is that it gives a status of a separate legal entity which a partnership firm does not have. In case of a partnership, a partner ’s personal assets are attached and they would be held personally responsible for each and every debt or liability that the business incurs. Hence, with the expansion of business, if partners want to increase its credibility and put limited liability on its members, it is more favorable for the partners to convert their partnership into a private limited company. Even though statutory compliance for a private limited company are higher than those of a partnership firm, it gives the company more opportunities to flourish and expand its reach.

Benefits of conversion from partnership to a private limited company

Limited Liability of Owners

The liability of members/directors is limited to an extent of capital contribution agreed by the members of the company. The loss or debt of a company cannot be assigned to members even at liquidation. Further, one member is not held responsible for the actions of negligence or misconduct of any other member.

Separation of Management and Ownership

The separate ownership and management help both to focus on their potential works. The shareholders assign responsibility to directors for operating and running the company without losing control in form of voting.

separate legal entity

A partnership is not a separate legal entity. If one of the partners dies or retires, or has to leave the firm, the partnership ceases to exist and so a new partnership has to be formed. But this is not the case of a private limited company. The private limited company is a separate legal entity hence it also provides the capacity to sue third parties.

Raising Capital

Raising Capital is easier in the Pvt. Ltd. Company as it allows the members to participate without taking on any personal accountability; unlike the general partnership where all common partners have unrestrained liability. The organization itself provides a number of ways to raise funds in the form of private equity, ESOP, and more.

Documents required to convert partnership to private limited company

PAN Card

PAN Card of shareholders and Directors.
Foreign nationals may provide a passport.

Identity Proof

Aadhar card, Voter ID/ Passport/ Driving License of Shareholders and Directors

Address Proof

Telephone Bill /Electricity Bill/ Latest Bank Account Statement of Shareholders and Directors

Photograph

Latest Passport size photograph of Shareholders and Directors

Business Address Proof

Electricity Bill/ Telephone Bill of the registered office address

NOC from partners

No Objection Certificate to be obtained from all the secured creditors of the applicant

Rent Agreement

Rent Agreement of the registered office should be provided, if any

Verification

A Copy of Partnership deed and Certificate of Registration duty verified by at least two partners of the general partnership.

Copy of ITR

A copy of latest income tax return filed by the Partnership firm

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Formulation of Company Name

Unique Name

Mainly it builds the company brand and preferably be a coined word

Business Object

Second part of name should suggest the business activity of the company

Constitution Type

Name of the company must end with “Private Ltd. Co.”

Learn more

Convert into company in 3 Easy Steps

1. Answer Quick Questions

It takes less than 10 minutes to fill in our questionnaire
Provide basic details & documents required for registration
Make payment through secured payment gateways

2. Experts are Here to Help

Assigned Relationship Manager
Procurement of Digital Signatures (DSC)
Application for Name Reservation under “RUN”
Documents drafting including MOA and AOA
Application of conversion into Private Company
Certificate of Incorporation
Application for PAN and TAN

3. Your firm is converted into company

All it takes is 12 -15 working days*

*Subject to Government processing time

Process of conversion of partnership firm into private limited co

1 -2 Days

Application for Digital Signature Certificate

3-5 Days

Checking Name availability
Application for Name Reservation under “RUN“
Reservation of Name

6-8 Days

Drafting of MoA, AoA & other required documents
Stamp Duty Payment
Notarization of required documents

8-10 Days

Filing out company registration application
DIN Allotment Application
Application for PAN and TAN of company

11-15 Days

Government processing time

Explore partnership to private limited company conversion

Frequently Asked Questions

2020-07-27T08:21:10+05:30

What are the minimum requirements to convert a partnership into Private Limited Company?

For Private Company registration, the following requirements must be fulfilled:
1. Minimum 2 directors shall be appointed, out of which one must be a resident of India.
2. Minimum 2 shareholders are required for this registration. Here, an individual may become shareholder and director at the same time.
3. A place of business in India must be provided as a registered office address

2020-07-27T10:05:28+05:30

What is the minimum Capital Requirement?

While registration, minimum authorized capital of ₹1 Lakh should be provided. The requirement of minimum paid-up capital is eliminated as a part of Government’s initiative to simplify business registration in India. However, each shareholder must subscribe at least 1 share for the registration and amount sufficient to run a business should be introduced.

2020-07-27T10:05:11+05:30

Who can become director in a Private Limited Company?

Any person above the age of 18 years can become a director in the company after procuring Director Identification Number (DIN). As there are no criteria provided in terms of citizenship or residency, a foreign national can also become a director. The application of DIN Allotment is now merged with the application for the formation of a company subject to a limit of maximum 3 DIN.

2020-07-27T10:04:56+05:30

What are the statutory compliance required for a Private Limited Company?

A private limited company must hold a Board Meeting at least once in every 3 months. In addition to the Board Meetings, an Annual General Meeting must be held by the Private Limited Company at least once every year.

2020-07-27T10:04:42+05:30

What is FDI Guidelines for Foreigners in a Private Limited Company?

100% Foreign Direct Investment is allowed in India in many of the industries under the Automatic Route. Under the Automatic Route, only a post-investment filing is necessary with the RBI indicating the nature of investment made. There are a few industries that require prior approval from the RBI, and in such cases, approval must first be obtained from RBI prior to the investment.

2018-08-01T15:24:53+05:30

what is the concept of Common Seal and is importance ?

There is no concept of a common seal in partnership. But a private limited company has a common seal which denotes the signature of the company and every company shall have its own common seal.

2020-07-27T10:04:04+05:30

Is capital gain or stamp duty charged upon conversion?

No Capital Gains tax or stamp duty shall be charged on transfer of property from Partnership firm to a Private Limited Company.

2020-07-27T10:03:50+05:30

What happens to the loss and unabsorbed depreciation of the partnership firm on conversion?

The accumulated loss and unabsorbed depreciation of Partnership firm are deemed to be loss/ depreciation of the successor company for the previous year in which conversion was effected. Thus, such a loss can be carried out for a further eight years in the hands of the successor company.

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