Partnership Firm can be converted into a Private Limited Company. For the conversion at least 7 Parters are required and at least 3/4 partners should give their consent for the conversion of Partnership Firm into Private Limited Company.
Can a Partnership Firm be converted into a Private Limited Company?
According to the Companies Incorporation Rules 2014 and Companies Act 2013, it is possible to convert a Partnership Firm into a Private Limited Company. For conversion following are the points that should be kept in mind:-
There should be at least 3/4th majority of Partners and pass a special resolution for the conversion of the partnership firm into Private Limited Company
There should be at least 7 members in the partnership firm for conversion into Private Limited Company
For conversion into a company, there should be at least 7 shareholders and 2 Directors
Directors and Shareholders can be the same person
Firm may be registered with the registrar of the Firms
There must be a provision in the Partnership Agreement to convert it into a Private Limited Company
There should be a written consent provided by the partners to convert the partnership into company
Procedure for the conversion of Partnership Firm into a Private Limited Company
Following are the steps which are required to convert a Partnership Firm into Private Limited Company:-
Step 3.After having the DIN number. Directors can apply for the name conversion of the partnership firm into a Private Limited Company in Form INC-1A. Following are the attachments which are required for filing these form.
Certified copy of Partnership deed
Certified copy of Balance Sheet of the Partnership Firm
Certified copy of the income tax assessment of the Partnership Firm
Consent of all the partners stating that they agreed to the conversion process
Copy of the resolution passed
After attaching these documents, Form INC-1A can be signed by the promoter of the company and same should be filed.
Step 4.After getting the approval of INC-1A, Applicant can have the Name Approval Letter of the company. From the SRN number on the Name approval letter, applicant can continue the process and file the Spice forms which are required to file for the incorporation
Step 5.After the approval of the Spice form, the applicant can have the Certificate of Incorporation.