Convert Your Partnership Firm to a Private Limited Company
Overall, converting an LLP into a Private Limited Company provides the advantages of limited liability protection, perpetual succession, better growth opportunities, and favorable tax benefits. However, the decision to convert should be based on the specific needs and future goals of the business.
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INTRODUCTION
✅ Conversion of Partnership Firm into Private Limited Company
One of the main advantages of forming a private limited company is that it creates a separate legal entity with distinct corporate status. In a partnership firm, each partner’s personal assets are at risk and partners have unlimited personal liability for the firm’s debts and obligations. As the business expands, converting a partnership into a private limited company makes sense for partners who want to enhance the firm’s credibility and limit their personal liability. Although a private limited company has higher statutory compliance requirements compared to a partnership firm, it offers greater opportunities for growth and helps achieve long-term business goals.
Advantage
Advantages of conversion from partnership to a private limited company
Separate Legal Entity
A partnership firm is not an independent legal entity — if a partner dies, retires, or exits, the firm may dissolve and a new partnership must be formed. In contrast, a private limited company is a distinct legal entity, separate from its owners. It continues to exist regardless of changes in membership and can sue or be sued in its own name.
Limited Liability of Owners
In a private limited company, the liability of shareholders and directors is limited to the amount unpaid on their shares. Even if the company is wound up, members are not personally liable for its debts or losses. Additionally, no member is responsible for the negligence or misconduct of other members.
Separation of Management and Ownership
A private limited company allows for a clear distinction between ownership and management. The shareholders (owners) and the board of directors (managers) have separate roles and responsibilities, which leads to better governance and operational efficiency.
Easier Fundraising Opportunities
Unlike general partnerships where partners have unlimited liability, a private limited company makes it simpler to raise capital. Investors, venture capitalists, and banks prefer private limited companies due to their structured governance and transparency. The company can issue shares, raise private equity, and offer ESOPs (Employee Stock Option Plans) to attract and retain talent.
A LIST OF DOCUMENTS
📑 Documents Required to Convert Partnership Firm into Private Limited Company
✅ PAN Card
PAN Card of all partners. Foreign nationals must provide a valid passport instead.
✅ Identity Proof
Aadhar Card, Voter ID, Passport, or Driving License of all partners.
✅ Photograph
Latest passport-size photograph of each partner.
✅ Address Proof
Recent telephone bill, electricity bill, or latest bank statement of directors and shareholders.
✅ Business Address Proof
Recent electricity bill or telephone bill of the registered office address.
✅ No Objection Certificate (NOC)
NOC must be obtained from each of the applicant’s secured creditors.
✅ Rent Agreement (if applicable)
Rent Agreement of the registered office premises.
✅ Verification Documents
A copy of the partnership agreement and the Certificate of Registration attested by at least two general partners.
✅ Copy of Income Tax Return (ITR)
Latest Income Tax Return filed by the partnership firm.
Note: All documents of foreign nationals or NRIs must be duly notarized or apostilled as per the applicable rules.
How to Choose a Name for Your Company
Special Name
It primarily establishes the company's brand and, ideally, is a newly invented term.
Operations of Business
Second part of name should suggest the business activity of the company
Suffix to Name
The last part of the company name must be "Private Ltd. Co."
Convert Your Partnership Firm into a Private Limited Company in 3 Easy Steps
1. Answer a Few Quick Questions
✅ Fill out our simple online questionnaire — it takes less than 10 minutes!
✅ Share basic details and upload the necessary documents for registration.
✅ Make a secure payment through our trusted payment gateway.
2. Let the Experts Handle It
✅ Get a dedicated Relationship Manager to guide you.
✅ Assistance with Digital Signature Certificates (DSC).
✅ Name availability check and reservation under RUN (Reserve Unique Name).
✅ Drafting of all required documents, including MOA & AOA.
✅ Filing of conversion application to a Private Limited Company.
✅ Obtain your Certificate of Incorporation, PAN & TAN.
3. Your Firm is Now a Private Limited Company!
✅ The entire process takes about 12–15 working days, subject to government processing time.
Step-by-Step Process Timeline
📅 Day 1–2:
Apply for Digital Signature Certificate (DSC).
📅 Day 3–5:
Check name availability and reserve your company name under “RUN”.
📅 Day 6–8:
Draft the Memorandum of Association (MOA), Articles of Association (AOA) & other documents.
Pay applicable stamp duty.
Notarize the documents.
📅 Day 8–10:
File the company registration application.
Apply for DIN (Director Identification Number).
Submit PAN and TAN applications.
📅 Day 11–15:
Government reviews and processes your application.
Congratulations! Your firm is now a Private Limited Company.
Frequently Asked Questions
Have questions before reaching out? Here are quick answers to some of the most common queries we receive about contacting us, consultations, and service inquiries.
To register as a Private Limited Company, you must ensure:
1️⃣ Minimum 2 Directors — at least one must be a resident of India.
2️⃣ Minimum 2 Shareholders — an individual can act as both shareholder and director.
3️⃣ Registered Office Address — you must provide a valid place of business in India.
At incorporation, your company must have a minimum authorised capital of ₹1 Lakh.
The requirement for minimum paid-up capital has been removed under the Government’s ease-of-doing-business initiative. However, each shareholder must subscribe to at least one share, and there should be enough capital introduced to run the business smoothly.
Any individual 18 years or older can become a director by obtaining a Director Identification Number (DIN).
There are no restrictions based on citizenship or residency, so foreign nationals can also be directors.
Note: Up to 3 DINs can be applied for during company formation via the SPICe+ form.
A Private Limited Company must:
✔️ Hold a Board Meeting at least once every quarter (3 months).
✔️ Conduct an Annual General Meeting (AGM) every financial year.
✔️ Maintain proper books of accounts and file annual returns and financial statements with the ROC.
India allows 100% Foreign Direct Investment (FDI) in most sectors under the Automatic Route, which requires only a post-investment filing with the RBI.
However, a few sectors require prior approval from the RBI before making the investment.
A partnership firm does not have a common seal.
A Private Limited Company, on the other hand, can have a Common Seal, which acts as the company’s official signature on important documents and legal papers.
It represents the company’s identity in transactions and agreements.