Conversion of Partnership firm to a Pvt Ltd co

Manish,

Can you elucidate more on the subject with relevant provisions under the Companies Act to prove your point.

As per the Companies Act, minimum two members are required for formation of  private company or other entity may converted into pvt ltd. The following procedure involving to incorporation of pvt ltd.

1. Name availability- Form-1A (Existing partnership also should apply to RoC)

2. Minimum 1 lakh Rs authorized and paid-up capital for pvt (In case partnership firm investment below 1 lakh, kindly increase 1 lakh or more ).

3. The directors must be obtain DIN (Director Identification Number)

(minimum two directors for pvt ltd)

4. Draft a Memorandum of Association (objects of the company) and Articles of Association either by advocate or company secretary.

5. Form-1, Form-18, Form-32 and required form filed through Ministry of Corporate Affirs portal for Incorporation.(www.mca.gov.in)

the compnies act itself provides a provisions for incorporating a pvt comp with two members so there is no need to prove it any further in absence of any restraining clause concerning firms.

Can any body provide me, the format of Memorandum and Articles of Association which needed to incorporate a Tour & Travels Private Company.

I do agree with Mr. Desai. He is absolutely right.

Dear Mr. Manish Singh,

With all due respect I want to say that Mr. A V Vishal is correct and would like to add something more to the interpretation of Sec 569, PART IX that Mr. Vishal quoted from Companies Act, 1956,  and which he might not have been able to explain properly.

"COMPANIES CAPABLE OF BEING REGISTERED.

(1) With the exceptions and subject to the provisions contained in this section, -

(a) any company consisting of seven or more members, which was in existence on the first day of May, 1882, including any company registered under Act No. 19 of 1857 and Act No. 9 of 1860 or either of them or under any laws or law in force in a Part B State, Corresponding to those Acts or either of them; and"

The heading of section 565 is “Companies capable of being registered”. In other words section 565 speaks of or contemplates registration of a “Company”. Ordinarily speaking, the word “Company” here as per section 3 of the Companies Act should mean a company registered under The Companies Act. It means that what is to be registered should be a company. The pertinent question is then whether a partnership firm is a company within the meaning of section 565(1)(b) capable of being registered under Part IX . In this connection Andhra Pradesh High Court in the case of Vali Pattabhirama Rao v. Sri Ramanuja Ginning and Rice Factory Pvt. Ltd. 60 Company Cases 568 [1986] (AP) has observed the word “Company” occurring in section 565 of The Companies Act, 1956 (corresponding to section 253(1)(ii) of the 1913 Act) which permits any company otherwise duly constituted according to law consisting of 7 or more members to be registered as a company. A partnership must be one such.

And above all, it should be kept in mind that there is no other section either in Companies Act, 1956 or Indian Partnership Act, 1932, that talks about conversion of a firm into a company having less than 7 members. Hence, position of law is silent in this regard. In that case only resort available is that one has to follow the route as available under PART IX of Companies Act, 1956.

And it is very well settled position of law that whenever law is silent on one fact but there is a provision available on similar facts then those provisions will prevail.

Therefore conversion of partnership can take place only by fulfilling requirements of PART IX of Companies Act, 1956. If one wants to convert a partnership firm into company without raising its minimum number of members to 7; then only option available is to incorporate a new company which will take over the business of existing partnership firm through a takeover agreement.

Always open to any comments or corrections.

I agree with Mr.Vishal