CONVERSION FROM PARTNERSHIP FIRM INTO PVT. LTD.COMPANY.
sanjiv batra
(Querist) 18 April 2009
This query is : Resolved
DATED: 17TH APRIL’ 2009.
DEAR SIR,
ACCORDING TO COMPANIES ACT 1956, A PRIVATE LIMITED COMPANY REQUIRES MINIMUM TWO SHAREHOLDERS FOR INCORPORATION, WHEREAS A PUBLIC LIMITED CO. REQUIRES SEVEN SHAREHOLDERS FOR INCORPORATION.
LOGICALLY THEREFORE I UNDERSTAND THAT WHEN A PARTNERSHIP FIRM WITH TWO PARTNERS WANTS TO CONVERT ITSELF INTO A PUBLIC LIMITED CO. UNDER CHAPTER-IX OF CO’S ACT, IT MUST FIRST ENHANCE THE NUMBER OF PARTNERS TO SEVEN, ONLY THEN IT CAN CONVERT ITSELF INTO A PUBLIC LIMITED CO., BUT ACCORDINGLY WHEN A PARTNERSHIP FIRM WITH TWO PARTNERS WANTS TO CONVERT ITSELF INTO A PRIVATE LIMITED CO. UNDER CHAPTER-IX OF THE CO’S ACT, IT CAN DO SO WITH TWO PARTNERS ITSELF WITHOUT ENHANCING THE NUMBER OF PARTNERS.
KINDLY CONFIRM MY UNDERSTANDING URGENTLY.
ALSO TELL ME THAT WHAT WILL BE THE INCOME TAX IMPLICATIONS?
THANKS
SKB
Guest
(Expert) 09 May 2009
Under LLP (Limited liability partnership), one can do so.
Regarding IT implications, corporate tax liability may arise.
