{"id":100309,"date":"2020-06-24T11:56:18","date_gmt":"2020-06-24T11:56:18","guid":{"rendered":"https:\/\/legalwindow.in\/?p=100309"},"modified":"2021-08-13T12:22:46","modified_gmt":"2021-08-13T06:52:46","slug":"how-to-convert-partnership-firm-into-a-private-limited-company","status":"publish","type":"post","link":"https:\/\/www.legalwindow.in\/blog\/how-to-convert-partnership-firm-into-a-private-limited-company\/","title":{"rendered":"How to convert Partnership Firm into a Private Limited Company?"},"content":{"rendered":"\r\n<p style=\"text-align: justify;\">With the multiple growth opportunities in the market and understanding the need of the corporatization, many of already registered and operating\u00a0Partnership Firms, limited liability partnerships are looking forward to switching their business into a company form. Business in corporate form looks more credible and solidifies the firm identity. Hence, in case a <a href=\"https:\/\/legalwindow.in\/partnership\/\">partnership firm<\/a> is looking to switch its business into a company, then it can be done in the following two ways:<\/p>\r\n<ul type=\"1\">\r\n<li class=\"lists\">Incorporating a new company<\/li>\r\n<li class=\"lists\">Convert existing entity\/business (LLP\/Partnership Firm) into a company<\/li>\r\n<\/ul>\r\n<p style=\"text-align: justify;\">The second option is more feasible and practical as such a change does not attract any kind of capital gain tax. However, converting a partnership firm into a company is a technical process, but if handled by expert legal experts can be simpler and cost-saving, as well.<\/p>\r\n\r\n\r\n\r\n<table style=\"border: 1px solid #ddd; text-align: left; margin-top: 1px;\" width=\"100%\">\r\n<tbody>\r\n<tr>\r\n<td style=\"padding: 9px; border: 1px solid #ddd; text-align: left; font-size: 16px;\"><strong style=\"padding: 10px;\">Page Content<\/strong>\r\n<ul>\r\n<li style=\"list-style-position: inherit; text-indent: 0px; padding: 3px;\"><a href=\"#benefits\">Benefits of converting Partnership Firm into a Company<\/a><\/li>\r\n<li style=\"list-style-position: inherit; text-indent: 0px; padding: 3px;\"><a href=\"#pre\">Pre -Requisite for Conversion of Partnership Firm into a Private Limited Company<\/a><\/li>\r\n<li style=\"list-style-position: inherit; text-indent: 0px; padding: 3px;\"><a href=\"#documents\">Documents required to convert partnership to Private Limited Company<\/a><\/li>\r\n<li style=\"list-style-position: inherit; text-indent: 0px; padding: 3px;\"><a id=\"benefits\" href=\"#procedure\">Procedure of conversion of Partnership Firm into a Private Limited Company<\/a><\/li>\r\n<li style=\"list-style-position: inherit; text-indent: 0px; padding: 3px;\"><a href=\"#conclusion\">Conclusion<\/a><\/li>\r\n<\/ul>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n\r\n\r\n\r\n<h2><strong>Benefits of converting Partnership Firm into a Company<\/strong><\/h2>\r\n<p>The major advantages of converting a Partnership Firm into a Company are as follows:<\/p>\r\n<ul>\r\n<li class=\"lists\">A Private Company protects owners from any personal liability and from other risks and losses.<\/li>\r\n<li class=\"lists\">An owner can take loans in the name of a company and can make investment in different companies<\/li>\r\n<li class=\"lists\">The directors of a Private limited Company has limited liabilities and are not personally responsible for any default in company affairs.<\/li>\r\n<li id=\"pre\" class=\"lists\">Private Limited Company attracts more customers<\/li>\r\n<li class=\"lists\">Various tax benefits are provided to the directors of a company<\/li>\r\n<li class=\"lists\">An owner can build goodwill for its brand and can have a worldwide reach<\/li>\r\n<li class=\"lists\">A company has the power to sue and be sued in its own name.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h2><strong>Pre -Requisite for Conversion of Partnership Firm into a Private Limited Company<\/strong><\/h2>\r\n<ul>\r\n<li class=\"lists\">A minimum of 2 or more members are required<\/li>\r\n<li class=\"lists\">A Meeting of partners must be held to take assent of majority of its partners<\/li>\r\n<li class=\"lists\">Authorizing two or more partners to take all the necessary steps for conversion of Partnership Firm<\/li>\r\n<li class=\"lists\">Executing all papers, documents, deeds etc. for conversion of Partnership firm into a company<\/li>\r\n<li class=\"lists\">NOC from the secured creditors of the firm, if any<\/li>\r\n<li id=\"documents\" class=\"lists\">Selecting a unique name for your company<\/li>\r\n<\/ul>\r\n<p><strong>Note: <\/strong><em>Your business can run under the same name as of that partnership (subject to name availability as per Companies Act guidelines). However, words \u201cprivate limited\u201d has to be added.<\/em><\/p>\r\n\r\n\r\n\r\n<h2><strong>Documents required to convert partnership to Private Limited Company<\/strong><\/h2>\r\n<p>Following are the documents that are accepted by MCA for converting a partnership firm into a Private Limited Company<\/p>\r\n<ul>\r\n<li class=\"lists\"><strong>Identity and Address Proof of Directors and Shareholders<\/strong>\r\n<ul>\r\n<li class=\"lists\">Scanned copy of PAN Card (Passport in case of Foreign Nationals &amp; NRIs)<\/li>\r\n<li class=\"lists\">Scanned copy of Voter\u2019s ID\/Passport\/Driver\u2019s License (Any one)<\/li>\r\n<li class=\"lists\">A Scanned copy of the latest bank statement\/telephone or mobile bill\/electricity or gas bill of the individual (Any one, not older than two months)<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n<p>Note: For the foreign nationals, apostilled or notarized copy of the passport has to be submitted compulsorily. All documents submitted should be valid and genuine.<\/p>\r\n\r\n\r\n\r\n<ul>\r\n<li><strong>Registered Office Proof<\/strong><br \/>In India, the company must have a registered office in India. Following documents needs to be mandatorily provided while giving Registered Office details:\r\n<ul type=\"1\">\r\n<li class=\"lists\">Scanned copy of the latest bank statement\/telephone or mobile bill\/electricity or gas bill in case you own property<\/li>\r\n<li class=\"lists\">Scanned copy of Notarized rental agreement<\/li>\r\n<li id=\"procedure\" class=\"lists\">A Scanned copy of No-objection certificate from the property owner<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n<p>Important to Note: Your registered office can be a commercial premises or it can be your residence also.<\/p>\r\n\r\n\r\n\r\n<h2><strong>Procedure of conversion of Partnership Firm into a Private Limited Company<\/strong><\/h2>\r\n<p>Following is the brief process of converting a partnership firm into a Private Limited Company:<\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"538\" class=\"wp-image-100315\" title=\"How to convert Partnership Firm into a Private Limited Company?\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/Process-of-Trademark-Registration-in-India-27-1024x538.png\" alt=\"How to convert Partnership Firm into a Private Limited Company?\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Process-of-Trademark-Registration-in-India-27-1024x538.png 1024w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Process-of-Trademark-Registration-in-India-27-600x315.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Process-of-Trademark-Registration-in-India-27-300x158.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Process-of-Trademark-Registration-in-India-27-768x403.png 768w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Process-of-Trademark-Registration-in-India-27.png 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\r\n\r\n\r\n\r\n<ul type=\"1\">\r\n<li class=\"lists\"><strong>Conducting meeting of the partners\/members<\/strong>: The first requirement for converting your business into a company is to hold a meeting of all the partners\/members of the Partnership firm and take assent for such conversion from all partners.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li class=\"lists\"><strong>Obtaining Consent from the secured creditors of the firm<\/strong>: A written consent or an NOC must be obtained from the secured creditors of the firm, if they exists.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li><strong>Obtain DSC (Digital Signature Certificate)<\/strong>: Get a<a href=\"https:\/\/www.mca.gov.in\/MinistryV2\/acquiredsc.html\" target=\"_blank\" rel=\"noreferrer noopener\"> DSC<\/a> for signing various e-forms required for conversion. All the partners who wish to become directors\/members needs to obtain it compulsorily.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li class=\"lists\"><strong>Publishing the Advertisement in Two Newspaper (English Daily and Vernacular)<\/strong>: Partnership firm seeking company registration shall publish an advertisement about registration, seeking objections, if any within twenty one (21) clear days from the date of publication of notice and the said advertisement shall be in\u00a0Form No. URC. 2,\u00a0which shall be published in a newspaper, in English and in the principal vernacular language of the district in which office of such firm situated and should be circulated in that district.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li class=\"lists\"><strong>Filing of an Affidavit<\/strong>: An affidavit, duly notarised, from all the partners has to be provided declaring that in the event of company registration, necessary documents or papers shall be submitted to authority with which the firm was earlier registered, for its dissolution as partnership firm so that it can be converted into a private limited company.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li id=\"conclusion\" class=\"lists\"><strong>Filing of necessary forms with ROC<\/strong>: Filing of necessary forms with ROC for the approval of conversion and for registration of firm into the Private Limited Company alongwith all the necessary attachments which specifies the fact of conversion and also all the other basis charter documents like MOA, AOA, etc which are required in case of registration of company under the Companies Act, 2013.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p>Contact Legal Window for selecting a unique name for your proposed company and completing the whole conversion process.<\/p>\r\n\r\n<p><a href=\"https:\/\/legalwindow.in\/private-limited-company\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-103801 size-full\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/private-co.jpg\" alt=\"Convert Partnership Firm into a Private Limited Company in Jaipur\" width=\"1000\" height=\"200\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/private-co.jpg 1000w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/private-co-600x120.jpg 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/private-co-300x60.jpg 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/private-co-768x154.jpg 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a><\/p>\r\n\r\n<h2><strong>Conclusion<\/strong><\/h2>\r\n<p style=\"text-align: justify;\">The major advantage that a Private Limited Company provides is of separate legal entity, which a Partnership firm never does. In case of partnership, the personal assets of a partner are attached thus making him personally responsible for any kind of default or liability. Hence, for increasing the credibility of business and obtaining various tax benefits, a Private Limited Company is the best option.<\/p>\r\n\r\n\r\n\r\n<p>So what are you waiting for? Contact Legal Window now to register a Private Limited Company.<\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>With the multiple growth opportunities in the market and understanding the need of the corporatization, many of already registered and operating\u00a0Partnership Firms, limited liability partnerships are looking forward&hellip;<\/p>\n","protected":false},"author":3,"featured_media":100316,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-100309","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-law"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to convert Partnership Firm into a Private Limited Company?<\/title>\n<meta name=\"description\" content=\"Read about How to convert Partnership Firm into a Private 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