Benefits regarding conversion of patnership firm
RACHIT
(Querist) 18 January 2014
This query is : Resolved
What are the benefits of converting the partnership firm into private company and then to public company instead of directly converting patnership firm to public company?
P.S - our partnership firm is converted to private company first and then after 5 days it is converted into public company .
we ask this to many experts but no satisfactory answer came. Please elaborate your explaination and the benefits especially in terms of taxation and registration fees.
ajay sethi
(Expert) 18 January 2014
commercial query . company can afford legal fees
R.K Nanda
(Expert) 18 January 2014
consult ur co.LA.
Guest
(Expert) 18 January 2014
Strictly warning you do not consider Experts as fools .First you define me what is Pvt Ltd and what is Public Ltd.How you the great changed pvt .ltd to public ltd in 5 days. what is your authorised capital.If you are genuine querist what is the name of your company.
RACHIT
(Querist) 18 January 2014
respected sir ,
my query is genuine , i want to know reason why this is been done by the partnership firm to first converted into private company and then to public in 5 days and why dsnt directly converted into public company .
i am c.s student and currently doing internship in that company and therefore cant disclose the name .
And if anyone dsnt know the reason then no one has the right to give any kind of warning because it effects ur repute .
Guest
(Expert) 18 January 2014
Only a pvt ltd co could be converted to public ltd and not a p/s firm directly
RACHIT
(Querist) 18 January 2014
yes sir i know that only a private company can be converted into public company . But why there is a difference of 5 days , Is company cannot take the certificate of incorporation and commencement on the same day ? , And is all the partnership firm who want to convert to public company be formed in the similar way ? Its very kind sir if you can clearify my doubts .
RACHIT
(Querist) 19 January 2014
sir , its not a academic query . why the company pay the registration fees 2 times ...... why not the the firm pays the one time registration fees as according to share capital for converting directly into public company ??
Murali Krishna
(Expert) 19 January 2014
Mr.Rachit,
Conversion of partnership from Company may be for many reasons. One of the reasons may be to avoid liability. I am sure, being an intern, you know that liability of shareholders in a company is limited.
From private limited company to public limited company, may for the reason that the shareholders may be increased by more than 50, or to sell shares to public at large. There may be myriad reasons.
Apply your book knowledge to the facts and analyse.
RACHIT
(Querist) 20 January 2014
respectes sir , the question is not why they converted from firm to pvt company and then to public company ...... the question is why they not directly form a public company why they first converted into private co... and then to public company and the matter is that all conversion took place in 5 days .......... what may be the behind thinking of doing this ??..... is there any benefit they derive by such conversion....??
Rajendra K Goyal
(Expert) 20 January 2014
The question has already been answered by the expert N.J.S.Rajkumar alias narasimha ji in following words:
Only a pvt ltd co could be converted to public ltd and not a p/s firm directly.
Ask from the management why they have done so in 5 days.
V R SHROFF
(Expert) 20 January 2014
commercial &/OR Academic query BY TRAINEE/ STUDENT. . [company can afford lawyers fee]
GO IN FORUM
Advocate. Arunagiri
(Expert) 20 January 2014
I am of the opinion that the partnership company can be converted directly to a public limited company. It need not go through the procedure
partnership to private ltd and then to public limited.
RACHIT
(Querist) 20 January 2014
sir arunagiri , i got the answer from you . i know that firm can directly be converted into public company . But what is the difference between 2 conversions ??
Advocate. Arunagiri
(Expert) 20 January 2014
Mr. Rachit
Please refer your previous communications:-
2 days back:- yes sir i know that only a private company can be converted into public company .
few minutes before:-
i know that firm can directly be converted into public company.
If you can give clarification on the two different contradictory statements, I can proceed further.
Guest
(Expert) 20 January 2014
As a lay man I would prefer to know from the Highly Learened Mr.Arunagiri what is Private Ltd and Public Ltd and P/s Firm.Moreover I WOULD PREFER TO TELL YOU LCI IS NOT A SITE FOR TIME PASS YOU SHOULD BE CONFIDENT AND JUSTIFIABLE IN WHAT YOU WANT TO SAY.MORE OVER MR> ARUNAGIRIRI PLEASE DONT TALK ABOUT YOUR FEES IN OPEN FORUM
malipeddi jaggarao
(Expert) 21 January 2014
It is purely academic query by CA student. He should study the books, circulars and enlighten this forum for giving practical solutions instead of seeking academic knowledge.
RACHIT
(Querist) 21 January 2014
respected sir , Arunagiri ...... iknow that i have previously typed about the fact that only a private company can be converted because before posting my query i was confused whether conversion can directly be done or not , but when the well renounced expert N.R.J rajkumar has said that only a private company can be converted . then i think i might be wrong .
but when sir you said conversion can directly be done then i was again confused . So pease i want to know what is the procedure of direct conversion into public company and what is the difference between 2 conversions ??
Advocate. Arunagiri
(Expert) 21 January 2014
As for as the conversion of partnership to a public limited, I hereby enclose a url, written by a company secretary. He had eloberated the procedure in detail, easy to follow.
http://www.caclubindia.com/articles/note-on-conversion-of-partnership-firm-into-a-limited-company-16345.asp#.Ut4jff26ZHw
Rajendra K Goyal
(Expert) 21 January 2014
i want to know what is the procedure of direct conversion into public company and what is the difference between 2 conversions
-- Academic query.
Advocate. Arunagiri
(Expert) 21 January 2014
When ever there is a difference of opinion arises, we will go for a third umpire, that is why I have provided a article written by a company secretary in CA Club.
For what purpose you want know the differences. If it is purely academic, I am not interested in replying.
Rajendra K Goyal
(Expert) 21 January 2014
i want to know what is the procedure of direct conversion into public company and what is the difference between 2 conversions
-- Academic query.
RACHIT
(Querist) 22 January 2014
Sir Arunagiri , the link you have provided is nowhere related to my query. I want to know whether conversion can be made directly to public company. The information in the url is given in our books but the answer is not sufficient.
And it is not anywhere given in the our books and thus not related to our academic.
Advocate. Arunagiri
(Expert) 22 January 2014
Go to the article, Use Ctrl+f and then type Public, It will take you to the relevant portion.
the relevant portion reads as follows "If and when the partners of the partnership firm propose to form a private limited or public limited company..........."
If you feel this is nowhere related to your query. if you feel that the article is not giving sufficient information, take the opinion of an auditor or company Secretary based on this article.
Guest
(Expert) 22 January 2014
Since your good self the querist is inquisitive when you convert a P/S firm directly to public ltd directly the procedures and formalities are so tedious and the always quicker method is followed by P/S to Pvt.Ltd and then to Public Ltd.Go thro GokalDas Exports Ltd website and study how they had done
R.V.RAO
(Expert) 23 March 2014
I AGREE SRI RAJ KUMAR JI HAS GIVEN LOGICAL EXPLANATION , AS TO WHY THE STAGE WISE CONVERSION FROM PARTNERSHIP TO PVT.LTD AND THEN TO PUBLIC LTD.CO.THE TENACITY OF LCI EXPERTS IN REPLYING A PERSISTENT QUERIEST IS APPRECIATED.
T. Kalaiselvan, Advocate
(Expert) 20 January 2014
