Conversion of Partnership Firm to Private Limited
Section 366 Companies Act 2013 | Chapter XXI Part I | Unlimited Liability to Equity Scale | Form URC-1 & SPICe+
Scale your partnership firm into a multi-shareholder Private Limited Company to raise venture capital and protect personal wealth with senior corporate lawyers and Practicing Company Secretaries. We execute the complete statutory conversion under Chapter XXI of the Companies Act 2013—securing 100% capital gains tax exemption under Section 47(xiii), automatic asset vesting, and seamless corporate transition.
Under Section 366 of the Companies Act 2013, an existing registered partnership firm having 2 or more partners can convert directly into a Private Limited Company without dissolving the firm. This transition enables founders to issue equity shares, onboard investors, and unlock institutional banking.
- Direct statutory conversion under Section 366 without triggering asset sales or dissolution
- 100% Capital Gains Tax Exemption under Section 47(xiii) of Income Tax Act 1961
- Mandatory 21-day newspaper notice publication in English and Vernacular dailies (Form URC-2)
- Fast-track MCA V3 e-filing (Form URC-1 & SPICe+ Part B) with zero defects
Why Choose Conversion of Partnership Firm to Private Limited Company?
General partnerships suffer from unlimited personal liability, difficulty in raising equity funds, and lack of perpetual succession. Converting to a Private Limited Company provides ironclad limited liability and unlocks venture capital.
Raise Venture Capital & Issue Equity Shares
Enable equity dilution, issue convertible instruments (CCPS), and onboard angel/institutional investors.
Eliminate Unlimited Personal Liability
Shield partners' personal real estate, savings, and assets from business creditors and commercial lawsuits.
Automatic Asset Vesting Under Section 368
All real estate, machinery, bank balances, client contracts, and licenses automatically vest in the new company.
Tax-Neutral Restructuring
Enjoy full capital gains tax exemption under Section 47(xiii) with zero stamp duty on automatic statutory vesting.
Implement Employee Stock Options (ESOPs)
Incentivize key software, sales, and executive talent with attractive stock option pools.
Turnkey CS Legal Representation
Our Company Secretaries handle partner resolutions, newspaper ads, URC-1 petitions, and CRC approvals end-to-end.
Comprehensive Conversion of Partnership Firm to Private Limited Company Offerings
Our conversion advisory covers partner equity structuring, public notices, and MCA Form URC-1 filings.
1. Partnership Audit & Statement of Accounts
- Unanimous written consent of all partners agreeing to convert under Chapter XXI
- Preparation of Statement of Accounts (certified by CA) not older than 15 days before filing
- Valuation of fixed assets, receivables, and intangibles of the partnership firm
- Structuring share capital allotment in exact proportion to partners' capital accounts
2. Public Notice & Creditor NOCs (Form URC-2)
- Publishing statutory notice in Form URC-2 in 2 daily newspapers (English & Vernacular)
- Providing 21 days for public/creditor objections from the publication date
- Serving individual written notices to all secured and unsecured creditors of the firm
- Securing written No Objection Certificates (NOC) from all creditors
3. Filing Form URC-1 with Registrar of Companies
- Filing e-Form URC-1 on MCA V3 portal with all statutory attachments
- Attaching CA-certified Statement of Accounts, list of partners, and asset/liability register
- Attaching newspaper advertisement copies, creditor NOCs, and partner declarations
- PCS digital pre-certification ensuring seamless scrutiny clearance
4. SPICe+ Filing & Certificate of Incorporation
- Filing SPICe+ Part B, e-MOA (INC-33), e-AOA (INC-34), and AGILE-PRO-S
- Allotment of Director Identification Numbers (DIN), PAN, TAN, and EPFO/ESIC
- Securing Certificate of Incorporation (COI) from Central Registration Centre (CRC)
- Intimating Registrar of Firms (ROF) regarding conversion
Step-by-Step Conversion of Partnership Firm to Private Limited Company Execution Process
Step 1: Partner Resolution & CA Audit
Passing unanimous partner resolution, auditing accounts, and preparing Statement of Accounts within 15 days of filing.
Step 2: Name Reservation & Newspaper Notice (URC-2)
Reserving company name on MCA portal and publishing mandatory 21-day public notice in newspapers.
Step 3: Filing Form URC-1 on MCA Portal
Submitting Form URC-1 with partner consents, CA certificates, and newspaper clippings.
Step 4: Filing SPICe+ Incorporation Forms
Submitting SPICe+ Part B, e-MOA, e-AOA, and AGILE-PRO-S for final incorporation.
Step 5: Grant of Certificate of Incorporation
ROC issues Certificate of Incorporation (COI) and new CIN, completing the conversion.
Documents Required for Conversion of Partnership Firm to Private Limited Company
Partnership Legal & Financial Dossier
- Partnership Deed: Certified copies of initial Partnership Deed and all supplementary amendment deeds
- ROF Registration Certificate: Certificate of Registration issued by Registrar of Firms (ROF)
- CA Statement of Accounts: Audited Statement of Accounts prepared within 15 days of URC-1 filing
- Past 3 Years Tax Returns: Income tax acknowledgement (ITR-5) and computation of income of the firm
Newspaper Clippings & Creditor NOCs
- Newspaper Clippings: Full page clippings of English and Vernacular newspaper advertisements (Form URC-2)
- Creditor NOCs: Written No Objection Certificates from all secured and unsecured creditors
- Declaration of Partners: Affidavit by all partners confirming compliance with statutory rules
- Asset & Liability List: Certified statement of all movable and immovable assets of the firm
Director & Shareholder KYC Records
- Partner KYC: PAN, Aadhaar/Passport, voter ID, and bank statements of all partners
- DIN & DSC: Valid Class-3 Digital Signature Certificates of directors and certifying PCS
- DIR-2 & DIR-8: Consent to act as director and non-disqualification declarations
- Registered Office Proof: Electricity bill, rent agreement, and landlord NOC for company registered office
Why Choose Lawful Journey?
Senior CS & Advocate Leadership
Direct supervision by qualified Company Secretaries and corporate advocates with 15+ years of specialized experience in statutory compliance, certification, and corporate law.
Pre-Filing Quality Review
Structured document reviews help identify missing information, inconsistencies, and filing risks before submission to the relevant authority.
Fast-Track Turnaround
Streamlined internal workflows, digital portal filing acceleration, and dedicated case managers keeping you updated at every single milestone.
End-to-End Confidentiality
Bank-grade data confidentiality and legally binding NDAs protecting your business records, proprietary technical data, and corporate filings.
Transparent Fixed Pricing
Clear, all-inclusive professional fees without hidden charges or surprise surcharges. Complete clarity before filing begins.
Post-Approval Support
Ongoing compliance tracking, annual renewal reminders, statutory register updates, and dedicated helpline for all future legal requirements.
Frequently Asked Questions
-
Yes. Under Section 47(xiii) of the Income Tax Act 1961, conversion of a partnership firm into a company is completely exempt from capital gains tax, provided all partners become shareholders in the same proportion as their capital accounts and hold at least 50% voting power for 5 years.
-
Yes, but it is highly recommended to register the partnership firm with the Registrar of Firms (ROF) or execute a formal supplementary deed before initiating conversion to ensure smooth MCA approval.
-
Under Section 368 of the Companies Act 2013, all immovable property automatically vests in the newly incorporated company by operation of law without requiring separate sale deeds or heavy stamp duty.
-
A minimum of 2 partners are required to convert a partnership firm into a Private Limited Company.
-
The new company receives a fresh corporate PAN and CIN; accumulated GST Input Tax Credit (ITC) is transferred to the new company via Form GST ITC-02.
Ready to Get Started with Conversion of Partnership Firm to Private Limited Company?
Schedule a confidential consultation with our Senior Company Secretaries and Legal Advisors. We provide strategic guidance, document preparation, and fast-track execution.
Call: +91 99102 18035 Chat on WhatsApp