The major benefit of registering a private limited company is that it gives a status of a separate legal entity which a partnership firm does not have. It is an expansion of the business. The major benefit of registering a private limited company is that it gives a status of a separate legal entity which a partnership firm does not have.
1) All the assets and liabilities of the firm immediately before the conversion become the assets and liabilities of the company.
2) No stamp duty
3) No Capital gain Tax
4) Continuation of Brand Value
5) Carry Forward and Set off losses and Unabsorbed Deprecation
6) Separate legal entity
7) Separation of Management and Ownership
Ministry of Corporate Affairs allowed conversion of Partnership Firm into Company under Companies Act, 2013, for such conversion there is need to prepare a list of documents and required to file the same with ROC in forms like URC-1, INC-32, INC-33 and INC-34 etc. While conversion there is need to consider the implications of income Tax provisions also like Capital Gain.
1) Hold a meeting of the partners
2) Filing of requisite form for Conversion
3) Preparation of Foundation documents of the Company
4) Filing for name approval
5) Filing of Incorporation documents
6) Receiving certificate of incorporation
1) Registered Partnership firm with minimum 7 Partners
2) Minimum Share Capital shall be Rs. 100,000 (INR One Lac) for conversion into a Private Limited Company
3) Minimum Share Capital shall be Rs. 500,000 (INR five Lac) for conversion into a Public Limited Co.
4) If the above requirement is not fulfilled by the firm, then the Partnership deed should be altered
5) Minimum 7 Shareholders
6) Minimum 2 Directors
7) The directors and shareholders can be same person
8) DIN (Director Identification Number) for all the Directors
9) DSC (Digital Signature Certificate) for two of the Directors