Conversion of Partnership Firm to a Company

1. Capital gain exempted under part IX conversion as it is merely change in constitution. acquisition of firm by company may be a doubtful case as the word mentioned in clause (xiii) section 48 is succession which is different from words "sell or otherwise transfer" mentioned in respect of succession of propreitorship business by company in clause (Xiv).

2. As per provisions of companies Act, yes, you need 7 partners. However, I fail to understand why as a closely held private company needs only 2 shareholders.

Vineet ji, Incase if you find the answer to your query about the variation of partners under the part IX, Please do share even I am inquisitive to know.

Sorry, could not find any answer to the discrepency. Section 565(1)(b) of Companies Act, 1956 clearly stipulates minimum number of members to be 7 for a company to be registered under part IX.

While other section put a restriction of 2 memebers for Private Limited Company. In Public Company, of course the minimum number is 7. Refer section 45 of Companies Act.