The major benefit of registering a Private Limited Company is that it has the status of a separate legal entity that a Partnership firm does not have. Private Limited Company has Limited Liability whereas in the case of partnership firm partners are personally liable for each and every debt. Private Limited structure is more transparent than other business structures. PLC has its own advantages such as Limited Liability, Perpetual Succession, easy access to funds, etc. Convert your Partnership Firm into PLC following the procedure mentioned below.
Step by step guide to help you convert Partnership firm into PLC:
– To take assent of majority of its partners, not less than three-forth of the partners should be present in person.
– To authorize two or more partners to take all steps necessary and to execute all papers, deeds, documents etc.
Obtain DSC of all directors and shareholders. In addition to that obtain written consent or No Objection Certificate from the secured creditors of the firm, if any.
File an application in RUN on the MCA website to obtain the name for the proposed company after conversion. Along with various attachments. Further also stating the proposal for conversion of the partnership firm.
File Form URC-1 within 30 days of name approval.
– As per section 374(b) of Companies Act, 2013 firm seeking registration under the provision of Part I of Chapter XXI shall publish an advertisement about registration.
– Seeking objections, if any within 21 clear days from the date of publication of the notice.
– The said advertisement shall be in Form No. URC-2.
– Further, these shall be published in 2 newspapers one in English and other in the principal vernacular language of the district.
Therefore, after obtaining name approval, and approval of E-FORM URC-1 from the Registrar, the applicant is required to draft the Memorandum and Articles of Association and other relevant documents necessary for incorporation.
File INC-32, INC-33, INC-34 and AGILE along with the earlier mentioned forms on MCA Website.
He shall issue a certificate of incorporation in Form No. INC.11.
Along with documents for its dissolution as a firm
No Capital Gains tax or stamp duty shall be charged on transfer of property from Partnership firm to a Private Limited Company.
Following are the minimum requirements:
– Appointment of minimum 2 directors, out of which one must be a resident of India.
– Minimum requirement of 2 shareholders for this registration. Further, an individual may become shareholder and director at the same time.
– A place of business in India must be provided as a regd. office address