Now partnership firms can also be converted into company as per Companies Act 2013.Companies (Authorised to Register)amendment rules, 2016 have allowed Partnership firms also to be converted in to company like LLP

By on 13-11-2018

NOW PARTNERSHIP FIRM CAN BE CONVERTED IN TO COMPANY

Now partnership firms can also be converted into company as per Companies Act 2013.Companies (Authorised to Register)amendment rules, 2016 have allowed Partnership firms also to be converted in to company like LLP

DOCUMENTATION :

 1 Decleration from proposed Directors that compliance of Indian stamp Act,1899 will be made.

 2 Statement of Assets and Liabilities* not older than 30 days from date of filing URC-1, certified by CA required, if a LLP/ firm being           converted into Company.

 3 Copy of latest ITR also required to be filed.

 STEPS FOR CONVERTION:

 STEP1 :HOLD A MEETING OF THE PARTNERS TO TRANSACT THE FOLLOWING BUSINESS

• Assent of majority of its members as are present in person or where proxies are allowed, by proxy, at a general meeting summoned for the purpose of registering the firm. Since the liability of the members of the firm is unlimited, when a firm desires to register itself as a company, the majority required to assent as aforesaid shall consist of not less than ¾ of the members as are present in person or where proxies are allowed, by proxy, at a general meeting summoned for the purpose.
• To authorize one or more partners to take all steps necessary and to execute all papers, deeds, documents etc. pursuant to registration of the firm as a Company.
• To execute a supplementary Partnership Deed to align it with the requirements as under:
• There must be at least 7 partners in the partnership firm;
• The firm may be registered with the Registrar of Firms;
• There must be a fixed capital divided into units ;
• There must be provision of converting a firm into company.
• There must be an agreement by the partners to convert the partnership to a company. This can be done by a contract in writing to this effect to which the partner’s resolution for conversion can be attached as annexure.
• Execute a settlement deed.

 STEP2: OBTAIN A DIRECTOR IDENTIFICATION NUMBER (DIN) FOR ALL PROPOSED DIRECTORS:

 The proposed director must have a DIN allotted by the Ministry of Corporate Affairs. DIN can be obtained by filing an online application with a copy of ID and address proofs. PAN Card is mandatory for Indian nationals for applying a DIN, Passport is enough for the Foreign National. For taking DIN the Digital Signature Certificate is required.

 STEP3: OBTAIN A DIGITAL SIGNATURE CERTIFICATE (DSC) FOR DIRECTORS:

 During the registration process, all the documents are submitted to the ROC online through www.mca.gov.in. These forms need to be authenticated by signing it using a Digital Signature Certificate issued by the Certifying Authority in India. Directors of the Company should have a digital signature certificate to authenticate documents that are submitted to the ROC.

 STEP4: IDENTIFY THE LOCATION AND AUTHORIZED CAPITAL OF THE COMPANY:

 It is important to have a proper address for the company's registered office. The address need not be a commercial location for registering a company. It could be the residential address of one of the promoters or any other identifiable address. The ROC will send all the correspondence relating to the company to the registered office address. The jurisdiction of the ROC will depend on the location of the registered office.

A private limited company should have a minimum paid-up capital of Rs. 1,00,000. Authorized capital can be any amount above the minimum limit. Company registration fee varies depending on the authorized capital of the company.

 STEP5: COMPANY NAME APPLICATION:

 The name of the company should end with the words 'Private Limited’. Before proceeding with the incorporation process, an application has to be filed for getting the company name approval from the ROC. It is preferable to submit the application with multiple names in the order of preference. Company name application must be in line with the Company Name Guidelines. Company name application is filed in INC-1 to the Ministry of Corporate Affairs, Government of India, to check the availability of the proposed name for registration of a new company.

Once approved, the name will be reserved for 60 days. Company registration documents have to be executed and filed within this time line.

 STEP6: EXECUTION OF COMPANY REGISTRATION DOCUMENTS:

 After the company name is approved, the company incorporation documents such as MOA and AOA have to be executed by the promoters in the prescribed format.

MOA and AOA have to be executed by the subscribers, they have to write all details such as name, father's name, residential address, occupation and the number of shares they agree to take on in their own handwriting. They will then have to sign the document and should enclose the signature of a witness who knows the subscribers.

 STEP7: SUBMISSION OF COMPANY REGISTRATION DOCUMENTS TO THE ROC:

 Once the MOA and AOA are executed, Copy of the same has to be submitted to the ROC of the respective state for the company registration. The originally executed MOA and AOA are not required to be filed with the ROC. The same has to be preserved by the promoters for future reference. Along with incorporation documents, details of directors and registered office are also required to be filed with the ROC.

 STEP8: COMPANY REGISTRATION AND CERTIFICATE OF INCORPORATION:

 The ROC will register the company after due verification of MOA, AOA and other details and will issue the Certificate of Incorporation (COI). It will also allocate a Corporate Identification Number (CIN) to the company so registered. The COI is now issued by the ROC in digital form with the digital signature certificate. No physical certificate will be issued by the office of ROC. A private company can commence its business after obtaining the COI and Certificate of Commencement of Business.