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What is partnership to private limited company conversion?
It is the process of converting a registered partnership firm into a private limited company under the Companies Act, 2013.
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Why should I convert my registered partnership to a private limited company?
Conversion provides limited liability, better funding options, improved credibility, and easier compliance under Section 44AB.
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Is conversion from partnership to private limited company compulsory?
No, it is optional. However, many growing firms prefer conversion for expansion and investor trust.
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Do all partners need to agree to the conversion?
Yes, consent of all partners is required along with a resolution for conversion.
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What happens to the assets and liabilities of the partnership?
All assets, liabilities, and contracts of the partnership automatically transfer to the new private limited company.
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Will the old partnership be dissolved after conversion?
Yes, the registered partnership is dissolved, and the business continues as a private limited company.
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Is a new PAN required after conversion?
Yes, the new private limited company must apply for its own PAN and TAN.
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How many directors are required for a private limited company?
At least 2 directors and 2 shareholders are mandatory. They may be the same individuals.
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Can existing partners become directors in the new company?
Yes, existing partners generally become shareholders and directors in the converted company.
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Do I need a new GST registration after conversion?
Yes, a new GST registration is required in the name of the private limited company.
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What are the tax implications of conversion?
Conversion does not attract capital gains tax if all conditions under Section 47(xiii) of the Income Tax Act are met.
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Is Section 44AB applicable after conversion?
Yes, if the turnover of the company crosses the threshold limit, tax audit under Section 44AB becomes mandatory.
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How long does the conversion process take?
On average, it takes 15–20 working days depending on the approvals from the Registrar of Companies (ROC).
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Do I need approval from creditors before conversion?
Yes, a No Objection Certificate (NOC) from creditors and banks is usually required.
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Can the new company have a different name from the partnership firm?
Yes, you can apply for a fresh name while filing for conversion under SPICe+ forms.
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What documents are needed for conversion?
Partnership deed, registration certificate, PAN, financial statements, partner IDs, and address proofs are required.
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Will I need to re-execute business contracts after conversion?
No, all existing contracts automatically shift to the private limited company after conversion.
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Can a partnership with losses convert to a private limited company?
Yes, it can. However, tax benefits of carried-forward losses are subject to Income Tax rules.
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What if I don’t convert my partnership firm?
You can continue as a partnership, but liability remains unlimited, and fundraising options stay limited.
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How does Ebizfiling help in this conversion?
Ebizfiling manages eligibility checks, documentation, ROC filings, name approval, and ensures quick conversion into a private limited company.