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Convert Partnership Firm into Private Limited Company (PLC)

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Divya Singhvi

Partnership Firm
PLC
RUN
Start & Run Business
Last updated on May 5th, 2021

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.

Private Limited Company (PLC) Registration
Online Company Registration. CS Assisted incorporation of Private Limited Company (PLC) in India.
[Rated 4.8 stars by customers like you]
Private Limited Company (PLC) Registration
Online Company Registration. CS Assisted incorporation of Private Limited Company (PLC) in India.
[Rated 4.8 stars by customers like you]

Pre-requisites to Convert Partnership Firm to PLC

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Steps to convert Partnership Firm into PLC

Step by step guide to help you convert Partnership firm into PLC:

  1. Convene a meeting for the Conversion of Partnership Firm Into Private Limited Company

    – 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.

  2. Apply for DSC and DIN for all directors and shareholders of the company.

    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.

  3. Obtain name Approval in RUN

    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.

  4. File Form URC-1 along with the necessary attachments with ROC

    File Form URC-1 within 30 days of name approval.

  5. Publish an advertisement in Two Newspaper

    – 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.

  6. Draft MOA and AOA

    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.

  7. File necessary forms with ROC

    File INC-32, INC-33, INC-34 and AGILE along with the earlier mentioned forms on MCA Website.

  8. Once the Registrar in satisfied on the basis of documents and information filed by the applicants,

    He shall issue a certificate of incorporation in Form No. INC.11.

  9. Intimate ROC under which it was previously registered.

    Along with documents for its dissolution as a firm

List of documents to be attached

With Form URC-1

With Form_INC-32, INC-33, INC-34

FAQs

Is capital gain or stamp duty charged on conversion?

No Capital Gains tax or stamp duty shall be charged on transfer of property from Partnership firm to a Private Limited Company.

What are the minimum capital requirements to convert partnership into private limited?

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

Got Questions? Ask Away!

  1. Hey @Vicky_Singh

    The major difference between a partnership firm and a company is that in a partnership firm, the liability is unlimited. Whereas in a company, the extent of liability is limited to the shares subscribed

    You can read about converting a partnership firm to a Private Limited Company here:

    Hope this helps!