Conversion of partnership firm to pvt.ltd
7866_mee
(Querist) 22 July 2015
This query is : Resolved
Hi Experts,
Mine is a partnership firm. We are 3 partners. We would like to convert our partnership firm to Pvt.Ltd company for the following :
1. The funds i have got from my well wishers, i would like to return them with shares so that liability on my part is reduced and that would give them advantage to transfer their shares to some interested party or sell them back to my pvt.ltd . Which is possible ? is this a good move ? or should i have to first clear thier dues , close down the partnership and then as a fresh start open up pvt ltd company .....
2. i would be able to expect more funds for expansion from other ppl/VCs where currently i have to do temporary adjustments like borrowing from others or mortagaging gold etc.
3. As a director, can i freely put in funds in to the company and take out funds for self as i have been doing while in partnership firm ?
4. suppose i take goad loan or additional bank loan as temporary measure to accumulate funds to put in the company for operations/expansion . Will all the shareholders also be affected with this decision ?
4. what are the documents needed from my side to convert partnership to pvt ltd ?
5. what will be the cost of conversion ? how do i calculate how much it will cost me ?
Please help in clarifying. Your help is very much needed.
Thanks
Mohammed Uvais
P. Venu
(Expert) 23 July 2015
This is more of a commercial query than a legal one.
Rajendra K Goyal
(Expert) 23 July 2015
Consult a local CA, You are going to form a company and a no. of problems need to be solved, steps has to be observed and for this consultation from a professional is required.
DR.VEDULA GOPINATH
(Expert) 23 July 2015
dear sir
Your object and plan of action are good.
I shall give you practical and convenient solution procedure to you.
please do send me your latest annual accounts and partnership deed to give the steps to be taken for incorproation of a private limited company and dissolution of the firm.
cs Dr vedula gopinath advocate/arbitrator
ADV-JEEVAN PATIL, MUMBAI
(Expert) 23 July 2015
Briefly if tirn over of propritory firm exceeded minimum prescribed limit (earlier more than 2 crores) on expansion, u may form Pvt. Ltd. Co. N register it.
ADV-JEEVAN PATIL, MUMBAI
(Expert) 23 July 2015
Briefly if tirn over of propritory firm exceeded minimum prescribed limit (earlier more than 2 crores) on expansion, u may form Pvt. Ltd. Co. N register it.
7866_mee
(Querist) 24 July 2015
Dear Dr.Vedula Gopinath/Adv-Jeevan,
Thanks for both of you for the reply.
1. So, I first have to dissolve the partnership firm and create a NEW entity of pvt ltd ? is that what you are proposing ? if so , why ?
2. Currently our Annual sales has been approx. 70-80Lahks after we commenced commercial production which is not near to 2Cr per year . In this case, we would have to wait till we reach 2Cr annual sales ?
please clarify
Thanks
Mohammed Uvais
KUMAR JAGADEESAN
(Expert) 24 July 2015
Dear Mr.Mohammed
As per the Companies Act 2013, your firm can be constituted as a public limited company without formally winding up the firm.All the assets and liabilities shall be taken over by the new company and the partners shall be issued shares. There are certain procedures to be followed for which pl.consult a practicing company secretary/ corporate lawyer/Chartered Accountant who may deal with company formation. There is no turnover limit for such conversion and on this I would differ from my learned friend Adv.Jeevan Patil
DR.VEDULA GOPINATH
(Expert) 24 July 2015
Please do send me partnership deed and annual accounts for me to advice you practically.
Your understanding appears to be not correct.
awaiting to hear from you
7866_mee
(Querist) 24 July 2015
Thanks a lot Dr.Vedula/Mr.Kumar,
Appriciate it very much.
I will gather the necessary documents requested from your side Dr.Vedula and will revert back . BTW, you are residing in which part of India ?
Thanks & Regards
Mohammed Uvais
DR.VEDULA GOPINATH
(Expert) 24 July 2015
PLESE SEND THE DOCUMENTS VIA EMAIL
vgnath@gmail.com
My headquarters is AP/TN Vizag and Hybad and also travel other places.
regards
T. Kalaiselvan, Advocate
(Expert) 26 July 2015
You can either contact local CA or send the details to expert Mr. Vedhula Gopinath for all such further needs.
