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Convert Partnership to Private Limited Company
Enhance Your Business Reach with Improved Funding, Credibility, and Security by Converting to a Private Limited Company
₹ 15000 only
Transform Partnership Firm into Private Limited Company
A key benefit of registering as a private limited company is the recognition of a separate legal entity, which is not available in a partnership firm. In a partnership, partners' personal assets are at risk, and they bear personal responsibility for all business debts and obligations. As a business expands and seeks to improve its credibility while minimizing liability for its members, converting from a partnership to a private limited company becomes a more advantageous choice. While private limited companies are subject to stricter regulatory requirements than partnerships, they provide greater potential for growth and wider opportunities for expansion.
Advantages of Transforming Partnership into a Private Limited Company
Easier Access to Capital
Members and directors have limited liability, meaning they are only responsible for the amount of capital they have invested in the company. In cases of liquidation, the company's debts or losses cannot be passed on to the members. Furthermore, one member is not liable for the negligent actions or misconduct of any other member.
Distinct Legal Entity
A partnership lacks the status of a separate legal entity. If a partner dies, retires, or leaves the firm, the partnership is dissolved, requiring a new one to be established. In contrast, a private limited company is considered a separate legal entity, allowing it to initiate legal action against third parties.
Separation of Management and Ownership
The distinction between ownership and management allows both parties to concentrate on their respective roles. Shareholders delegate the responsibility of operating the company to the directors while retaining control through their voting rights.
Limited Liability for Owners
Securing capital is more straightforward in a Private Limited Company since members can contribute without assuming personal liability. This is in contrast to a general partnership, where all partners face unlimited liability. The company structure offers various avenues for funding, including private equity and Employee Stock Ownership Plans (ESOPs), among others.
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Our expert team will manage the Conversion of Partnership To private limited company
Certificate of incorporation will be mailed after completion of registration
How to Convert Partnership To LLP with Corporate Shastra
Documents Required to Convert Partnership to Private Limited Company
PAN Card: PAN Card of shareholders and directors. Foreign nationals may provide 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: Latest Electricity Bill/ Telephone Bill of the registered office address.
NOC from owner: No Objection Certificate to be obtained from all the secured creditors of the applicant.
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.
Explore Partnership to Private Limited Company Conversion
What are the minimum requirements to convert a partnership into Private Limited Company?
For Private Company registration, the following requirements must be fulfilled:
Minimum 2 directors shall be appointed, out of which one must be a resident of India.
Minimum 2 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
What is the minimum Capital Requirement?
Who can become director in a Private Limited Company?
Comparison of Business Structures
Proprietorship | Partnership | OPC | LLP | Private Limited | |
|---|---|---|---|---|---|
Ownership | Sole Ownership | Min 2 partners Max 50 partners | Only 1 member | Min 2 Designated Partners | Min 2 Directors Min 2 Shareholders Max 15 Directors Max 200 Shareholders |
Separate
Legal Entity | No | No | Yes | Yes | Yes |
Applicable Law | No specified Act | Partnership Act, 1932 | Companies Act, 2013 | Limited Liability Partnership Act, 2008 | Companies Act, 2013 |
Statutory Audit | Not Mandatory | Not Mandatory | Mandatory | Based On Applicability | Mandatory |
Liability | Unlimited | Unlimited | Limited | Limited | Limited |
Perpetual Existence | No | No | Yes | Yes | Yes |
Ownership Transferability | No | Yes (Restricted) | Yes (Restricted) | Yes | Yes |
Taxability | Low | High | Moderate | High | Moderate |
Compliance
Requirement | Low | Low | High | Moderate | High |