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

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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

Documents required to convert partnership to private limited company

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Formulation of Company Name

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Process of conversion of partnership firm into private limited co

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Frequently Asked Questions

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 7 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

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.

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.

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.

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.

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.

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

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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Convert Partnership to Private Limited Company

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