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Conversion of partnership firm into pvt ltd co.

Jayanti Dey (Practicing Company Secretary) (271 Points)

18 January 2013

Please let me know what documents & formalities are required to convert a Partnership firm into a Pvt Limited Company?

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Sanket (!..Live to Give..!) (16427 Points)
Replied 18 January 2013

Partnership firm, which intends to convert the firm into a company, the minimum number of partners must be seven and in case there are less than seven partners, the number of partners must be increased to seven, if the conversion is intended to take place under Part IX of the Companies Act, 1956.

PROCEDURE FOR REGISTERATION OF COMPANY UNDER PART IX OF THE COMPANIES ACT:

a) The Partnership firm should consist of atleast 7 Partners failing whichthe number may be increased by the firm for the purpose by a supplemental deed or by reconstituting the firm.

b) It is to be ensured that the Deed of Partnership should elaborate the business activities of the firm in order to ensure the same could be incorporated in the objects clause in the Memorandum of Association.

c) Ensure that the firm is registered with the Registrar of Firms.

d) Ensure that the Capital clause of the Partnership Deed is bi-furcated into

i) Fixed Capital of at Rs.1 Lakh.

ii) Current captial indicating the amount of fixed capital against the name of each partner.

e) Agreement by partners to convert the firm into a company.

f) The other formalities procedures as required for incorporating a new company has to be followed, such as Memorandum of Association and Articles of Association is to be drafted, Form 1, 18, and 32 has to be filed subsequent to be approval of the name of Company is obtained after filing of Form IA. Along with the Regular Attachment with Form IA, the following documents are also required to be enclosed.

i) Letter stating that name application is for conversion of a Partnership firm as a limited company and the application is made in pursuance of Section 565 of the Companies Act:

ii) Copy of the Partnership Deed;

iii) Copy of the last balance sheet;

iv) Copy of the IT Assessment Order:

v) No objection Certificate signed by all the partners.

vi) A copy of true extracts of Register of Firms from the Registrar of Firms, if not, an affidavit of the partners.

For registration of the Company under Part IX of the Companies Act,1956,

a) Form No.37 along with

i. Partnership Deed:

ii. Form No.39

iii. Form No.40 giving statement of Particulars:

iv. Form No.41 giving copy of resolution;

b) Original name approval letter;