Convert Partnership to Private Limited Company

Expand your business reach with better funding , credibility and security by converting 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

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.
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.
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.”

Convert into company in 3 Easy Steps

  • It takes less than 10 minutes to fill in our questionnaire
  • Provide basic details & documents required for registration
  • Make payment through secured payment gateways
  • 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
  • All it takes is 12-15 working days*

*Subject to Government Processing Time

Process of conversion of partnership firm into private limited co

  • Application for Digital Signature Certificate
  • Checking Name availability
  • Application for Name Reservation under “RUN“
  • Reservation of Name
  • Government processing time
  • Filing out company registration application
  • DIN Allotment Application
  • Application for PAN and TAN of company
  • Drafting of MoA, AoA & other required documents
  • Stamp Duty Payment
  • Notarization of required documents
Explore partnership to private limited company conversion

Frequently Asked Questions

Whether the Annual Filing is necessary for all companies?
Yes, RoC compliance for Private Limited Companies are necessary for every registered company. Irrespective of the total turnover or the capital amount, the company must comply with the annual compliance requirement. The annual compliance is due after the AGM of the company since its first financial year.
What is the penalty for non-compliance of annual filing of Private Limited Company?
Since July 2018, companies failing to follow the statutory compliance for Private Limited will be charged ₹100 for each day of a delay till the actual date of filing. There is no ceiling limit to an additional fee. For continuous failure, penalty apart from the additional Government fee can be levied on both – company and directors, including the imprisonment.
Whether the audited financial statement is mandatory annual filing for Private Companies?
Audited financial statements are necessary for every company since its incorporation. The company must file the audited statements only. Also, non-audit of financial statement is not an excuse to delay the annual filing.
Is appointment of statutory auditor falls under annual compliance ?
A company can opt to appoint a statutory auditor either for a period of five consecutive years or till the conclusion of next AGM. Therefore, an appointment of the statutory auditor cannot be considered as a part of annual compliance.
In case of no operations in the company , do directors require to sign directors report ?
As per Companies Act, 2013 it is mandatory to submit the signed Director Report for every financial year with MCA by filing an Annual return of the company. The Director Report is considered as an attachment for the form MGT-7
Which is the form filed for appointment of Statutory Auditor?
Form ADT-1 is required to be filed for appointment or replacement of Statutory Auditor.
Which form is an attachment to the companies Director Report ?
MGT-9 is an attachment to the company’s director report which is an extract of MGT-7 and addresses the following :
1. Registration and other details like CIN, date of incorporation, companies name and address of a registered office
2. Principle business activity of the company
3. Of holding, subsidiary, and associate companies
4. Shareholding pattern
5. Indebtedness of the company
6. Remuneration of managing directors, directors and/or manager, and key managerial personnel.
7. Penalties/ Punishment/ Compounding of offense
How should the transfer or transmission of shares of the company be notified to the MCA?
Such intimation can be made through filing MGT-7 by the 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.