Transform your partnership into a private limited company with Auriga Accounting. Our specialists ensure a smooth process, managing all compliance and legal requirements efficiently.
Partnership To Private Limited Company
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Auriga Accounting has a team of registration experts who can provide complete guidance to register your APTA Certificate.
Our team of experts will get in touch with you and collect all necessary documents and details
We fill out and file your application for Partnership To Private Limited Company
Ready Your Partnership To Private Limited Company
Auriga Accounting has a team of registration experts who can provide complete guidance to register your Partnership To Private Limited Company.
Our team of experts will get in touch with you and collect all necessary documents and details
We fill out and file your application for Partnership To Private Limited Company
Ready Your Partnership To Private Limited Company
In the initial stages of their business, entrepreneurs often choose Sole Proprietorship or Partnership due to their low costs and simple compliance requirements, with the expectation that the business will grow and generate higher revenues over time. To limit liability and enjoy the benefits of a private limited company, many Partnership firms convert into Private Limited Companies.
Converting a Partnership into a Private Limited Company creates a separate legal entity, which helps reduce personal liability—personal assets remain protected except in cases of fraud. The process of incorporation and ongoing compliance for a private limited company is governed by the Companies Act, 2013, and shares are held privately.
Separate Legal Entity: Converting a Partnership firm into a Private Limited Company grants the business the status of a separate legal entity, which a Partnership does not have.
Limited Liability: A Private Limited Company provides limited liability to its shareholders, protecting their personal assets. In contrast, partners in a Partnership are personally liable for all debts and liabilities.
Transparency: The formation of a Private Limited Company is more transparent and regulated compared to other business structures, including Partnerships.
Additional Benefits: Private Limited Companies enjoy advantages such as limited liability, perpetual succession, easier access to funding, and more structured governance—benefits that Partnerships typically lack.
Ownership Transfer: In a Private Limited Company, ownership can be transferred with the consent of shareholders. Conversely, in a Partnership, a partner cannot transfer their share without following the terms specified in the Partnership deed.
Compliance Requirements: Private Limited Companies are subject to more extensive compliance obligations compared to Partnership firms.
Number of Partners: The partnership must consist of at least two partners to qualify for conversion into a Private Limited Company.
Minimum Capital Requirement: There is no statutory minimum capital for private limited companies; however, the partners should invest a sufficient amount as per regulatory guidelines.
Legal Capacity: All partners should possess the legal capacity to enter into contracts, meaning they are of legal age and of sound mind.
Insolvency or Bankruptcy Status: The partnership must not be undergoing insolvency or bankruptcy proceedings.
Legal Compliance: The partnership should adhere to all applicable laws and regulations relevant to business operations.
Partnership Deed: The existing partnership agreement should allow for or be amended to enable the transition into a company.
Business Type Restrictions: Any restrictions related to the nature of the business or licensing requirements should be satisfied prior to conversion.
Residency Requirements: The proposed directors of the new private limited company should generally meet the residency criteria specified under the Companies Act.
a) The partnership must be a registered Partnership firm with a minimum of two or more partners.
b) The minimum share capital required for converting into a Private Limited Company is Rs. 100,000 (One Lakh INR).
c) The Partnership deed must include a provision for converting the firm into a company.
d) The partners must mutually agree to convert the Partnership into a Private Limited Company.
e) If the Partnership deed does not contain the necessary provisions, it should be amended accordingly.
f) The minimum number of shareholders and directors required is two; however, the same individuals can serve as both shareholders and directors.
g) All directors must obtain a Director Identification Number (DIN).
h) At least two directors must possess a Digital Signature Certificate (DSC).
Review Partnership Agreement: Verify that the Partnership Deed includes a clause for conversion into a company. If absent, amend the deed with the consent of all partners.
Obtain Digital Signatures: Secure Digital Signature Certificates (DSC) for at least two partners designated as directors.
Apply for Director Identification Numbers (DIN): Obtain DINs for all proposed directors by submitting the required applications and supporting documents.
Reserve Company Name: Select and reserve an appropriate name for the Private Limited Company through the Registrar of Companies (ROC).
Prepare and File Incorporation Documents: Draft the Memorandum of Association (MOA), Articles of Association (AOA), and other necessary documents, then submit them to the ROC for registration.
Pay Registration Fees: Remit the applicable registration fees and submit all required documents for company incorporation.
Receive Certificate of Incorporation: Upon approval, obtain the Certificate of Incorporation, officially establishing the company.
Transfer Assets and Liabilities: Transfer partnership assets and liabilities to the newly incorporated company in accordance with legal requirements.
Notify Authorities: Update relevant government and statutory authorities about the change from partnership to company.
Ensure Regulatory Compliance: Complete all necessary compliance steps, including updating tax registrations and other statutory records related to the new entity.
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