Convert Partnership to Private Limited Company

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If you want to grow a small or medium-sized business into a larger one or inject equity capital, turning your partnership firm into a private limited company is a suitable alternative.

The need of a minimum of seven members for any business to be turned into a Private Limited Company has been abolished with the introduction of the companies amendment act of 2017. Any entity, whether it be an LLP, partnership firm, co-operative society, or any other business entity created under any other legislation, with a minimum of two members can be registered as a private limited company under the modified section 366 of the corporations Act, 2013. Other conditions must be met for the conversion to occur, including getting the consent of all partners and secured creditors, publishing a notice in the newspaper asking for objections in both English and the local language, and then going through the private limited company incorporation process.

The alternative choice available to the partners is to establish a separate Private Limited Company and then have the entire business of the Partnership Firm transferred to the company through a written agreement. Under this option, the requirements mentioned above, such as the requirement for having a minimum of two partners and newspaper advertisements, are not required to be satisfied, but it may be subject to stamp duty on property transfers through takeover agreements and may differ between states.

Conversion of a Partnership Firm into a Private Limited Company: Steps to Take


At a meeting, the partners of the partnership firm must approve the conversion of the partnership firm into a private limited company.


Obtain a director identification number and a certificate for digital signatures.


By submitting an application in EFORM INC 1, the Registrar of Companies must be contacted for name approval.


The applicant must compile and submit the E-FORM URC-1 along with the necessary documentation after receiving name permission from the Registrar of Companies.


After the Registrar has approved the name and E-FORM URC-1, the applicant must draught the Memorandum and Articles of Association and any other pertinent documents needed for incorporation.


The applicant must submit a number of documents to the Registrar of Companies, including the MOA and AOA in the appropriate E-forms. After verifying compliance, the Registrar will issue a Certificate of Incorporation.

Key Features of Partnership Firm Conversion to Private Limited Company