Section 565 to Section 581 under Part IX of the Companies Act, 1956 deals with such conversion. The eligibility for such conversion is:
(i) Minimum seven number of members
(ii) A company should be a joint-stock company as defined in Section 566
(iii) Majority of members should give their assent for the proposed conversion.
Procedure for conversion of Partnership firm into a company is as follows:
1. Prepare a draft of Partnership deed which shall contain following details along with the other necessary details to regard the Partnership firm as an existing Joint Stock Company as per the provisions of Section 566 of the Companies Act, 1956.
2. File the Partnership Deed with the Registrar of Firms
3. Convene a Meeting of the Partnership Firm and pass the resolution for the conversion of the partnership into a company and for giving the authority to any two partners of the company to take the necessary steps for the proposed conversion.
4. Obtain DIN for the proposed directors.
5. Obtain DSC for at - least two directors as Form 39 needs to be digitally signed by two directors
6. File Form No. 1A for the availability of Name with the concerned Registrar of Companies. The proposed name shall contain the name of the partnership firm, which is proposed to be converted into a Company under Part IX of the Companies Act. The Form shall be accompanied by the following documents.
7. After obtaining the Name Availability Letter, prepare Memorandum & Articles of Association and rest of the documents necessary for the purpose of proposed conversion
6. Make Payment of stamp duty on the following documents and get all the documents signed from the authorized persons
- Form 1
- Form 37
- Form 39
- Memorandum and Articles of Association
7. Get form 18 and 32 duly certified by the Company Secretary/ Chartered Accountant/ Cost Accountant in whole time practice
8. Filing of documents
Following documents should be submitted to the concerned ROC for the purpose of getting proposed conversion.
i. Two copies of Memorandum and Articles of Association duly signed and stamped.
ii. Form No. 1 on a stamp paper of Rs. 100/-
iii. Form No. 18
iv. Form No. 32. (in duplicate)
v. Letter of Authority on a stamp paper of Rs. 100/
vi. Original Name Approval Letter.
vii. Form No. 37 on a stamp paper of Rs. 100/- along with a list of annexure
viii. Certified as true copy of all the Partnership deeds entered into by the partners with effect from the formation of such partnership till the date of conversion.
ix. Form No. 39 on stamp paper of Rs. 100/- along with list of members as annexure
x. An Affidavit on a Stamp Paper of Rs. 100/- for giving declaration that there or no legal suits pending against the partnership OR alternatively the declaration giving the list of the suits pending against the Partnership firm. Any two directors of the company shall sign the declaration. The affidavit shall have to be notarized from the Notary Public before submitting to the concerned ROC.
xi. Document evidencing payment of necessary registration fees to the Registrar of Companies
Copies of duly stamped e-form 1, 37 and 39 are required to be submitted physically to the concerned Registrar of Companies
After getting a Certificate of Incorporation. Make necessary arrangements for obtaining the Common Seal, Share Certificates, Loose Leaf Binder, Statutory Register etc.
For further details, please refer to our article below: