Convert Partnership to Pvt. Ltd.

Convert Partnership to Pvt. Ltd.

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OVERVIEW

Ministry of Corporate Affairs allowed conversion of Partnership Firm into Company under Companies Act, 2013, for such conversion there is need to prepare a list of documents and required to file the same with ROC in forms like URC-1, INC-32, INC-33 and INC-34 etc. While conversion there is need to consider the implications of income Tax provisions also like Capital Gain. In below mentioned article author attempt to cover up the provisions of Companies Act and capital gain implication while conversion from Partnership firm into Company.

Partnership, LLP, PLC, OPC, Sole Proprietorship, Public Company. A country like India gives you many more options when it comes to business. As an Entrepreneur, you have the choice to select between these forms of business. But before choosing you need to know the pros and cons of all these forms. You need to see which form will benefit you and your business the most. All of these forms have different requirements, different advantages, and disadvantages.

partnership
 

REQUIREMENT FOR CONVERSION

1.   Partnership firm to be registered with the Registrar of Firms

2.   Minimum 2 Partners

3.   Amend Partnership deed – Add clause for conversion in deed, if required

4.   All partners of the partnership firm shall become shareholders of the company in the same proportion in which their capital accounts stood in the books of the firm on the date of the conversion.

5.   Consent of majority of members by calling a general meeting for conversion.

6.   Steps for Conversion

 

HOLD A MEETING OF THE PARTNERS TO TRANSACT THE FOLLOWING BUSINESS.

To authorize one or more partners to take all steps necessary and to execute all papers, deeds, documents etc. pursuant to registration of the firm as a Company.
To execute a supplementary Partnership Deed to align it with the requirements as under.
There must be at least 2 partners 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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