Convert Partnership to Private Limited Company
Overall, when a company is converted into a private limited company, it has the protection of limited liability, regular succession, positive income and tax advantages but a decision should adaptation depends on the project needs and specific circumstances.
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INTRODUCTION
Conversion of Partnership firm into Private limited co.
One of the main advantages of forming a private company is that it creates a legal entity with different corporate status In a partnership, each partner’s personal assets are linked and they have personal responsibility for the company’s debts and liabilities. Therefore, it makes more sense for partners to transform their partnership into a private limited company as their firm grows if they wish to boost its legitimacy and provide its members limited responsibility. A private limited business has greater options to grow and fulfill its goals even if it has more statutory compliance requirements than a partnership firm.
ADVANTAGES
Advantages of conversion from partnership to a private limited company
separate legal entity
A partnership isn't an independent legal body. A new partnership must be created in the event that one of the partners passes away, retires, or must quit the company. However, a private limited corporation is not like this. Since the private limited corporation is a distinct legal entity, it has the ability to bring lawsuits against other parties.
Limited Liability of Owners
The liability of the members/directors is limited to the maximum amount agreed upon by the members of the board. Even in the case of a company being wound up, the losses or expenses cannot be distributed among the members. Furthermore, no member is liable for the negligence or misconduct of another member
Separation of Management and Ownership
Only the amount of capital decided upon by the board members will be the limit of responsibility for directors and members. Members cannot be held responsible for any loss or debt, not even in the event that the firm is liquidated. Furthermore, no member shall bear responsibility for the carelessness or wrongdoing of another member.
Raising Capital
In contrast to a general partnership, where all common partners have unlimited liability, raising capital is simpler for a Pvt. Ltd. Company since its members can contribute without accepting any personal responsibility. The organization itself offers several avenues for raising capital, including ESOP, private equity, and other means.
A LIST OF DOCUMENTS
Documents required to convert partnership to private limited company
PAN Card
PAN Card of all partners Foreign nationals may provide passport
Identity Proof
All partners' Aadhar cards, voter IDs, passports, and driver's licenses
Photograph
Latest Passport size photograph of all partners
Address Proof
Telephone bill, electricity bill, and most recent statement of directors' and shareholders' bank accounts
Business Address Proof
The registered office address's telephone and electricity bills
NOC from partners
A No Objection Certificate must be acquired from each of the applicant's secured creditors.
Rent Agreement
Rent Agreement of the registered office should be provided, if any
Verification
A copy of the partnership agreement and the Certificate of Registration, both of which have been attested to by two or more general partners.
Copy of ITR
a copy of the Partnership firm's most recent income tax return
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Formulation of Company Name
Special Name
It primarily establishes the company's brand and, ideally, is a newly invented term.
Business Object
Second part of name should suggest the business activity of the company
Constitution Type
The last part of the company name must be "Private Ltd. Co."
Convert into company in 3 Easy Steps
1. Respond to Quick Questions
- Our questionnaires take less than ten minutes to complete.
- Give the essential information and paperwork needed to convert a proprietorship to a partnership.
- Pay using a safe and secure payment gateway.
2. Experts are Here to Help
- Dedicated 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*
Process of conversion of partnership firm into private limited co
1 -2 Days
- Application for Digital Signature Certificate (DSC)
- Application for DIN allotment of Designated Partners
3 - 5 Days
- Checking Name availability
- Application for Name Reservation under “RUN“
- List IteReservation 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
What conditions must be met in order for a partnership to become a Private Limited Company?
In order to register as a Private Company, the following conditions must be met:1. There must be at least two directors selected, one of whom must be an Indian resident.
2. In order to register, at least two shareholders must be present. In this case, a person may simultaneously occupy the positions of director and stockholder.
3. The registered office address must be a place of business in India.
- A minimum authorized capital of ₹1 Lakh must be submitted at the time of registration. The government of India is making efforts to streamline business registration, including the elimination of the minimum paid-up capital requirement. To register, a minimum of one share must be subscribed by each shareholder, and an amount adequate to operate a firm should be introduced.
- After obtaining a Director Identification Number (DIN), any individual who is older than eighteen (18) may have a director position in the organization. A foreign individual may also hold the position of director because there are no residency or citizenship requirements specified. The application for the establishment of a company and the application for DIN allocation have now combined, with a maximum of three DIN allowed.
- A board meeting must be held by a private limited corporation at least once every three months. The Private Limited Company is required to have an Annual General Meeting in addition to Board Meetings at least once a year.
- India allows 100% Foreign Direct Investment in various industries covered by the Automatic Route. Only a post-investment filing with the RBI specifying the type of investment made is required under the Automatic Route. A few industries need RBI permission in advance, and in certain situations, RBI approval must be acquired before making an investment.
The idea of a shared seal is nonexistent in partnerships. However, each company must have its own common seal, which serves as the firm’s signature. A private limited corporation has one.
