Procedure for Conversion of Partnership Firm to Company

Priya Gandhi

Priya Gandhi

Published on: Nov 20, 2025

Aakanksha Singhal

Updated on: Nov 20, 2025

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Introduction

Converting a Partnership Firm into a Company is a strategic legal process where the business structure is formally changed.

This procedure involves transferring all the firm’s assets and liabilities to a new corporate entity. The conversion is governed by the Companies Act, 2013, and requires the unanimous consent of all existing partners.

Applicable Provisions

1. Section 366 of Companies Act, 2013
2. 3, 4, 5 of Companies (Authorised to Register) Rules, 2014
3. Rule 8 and 9 of the Companies (Incorporation) Rules, 2014

Mandatory Requirements

1. Obtain unanimous written consent of all partners for the proposed conversion
2. All existing partners must agree to become shareholders of the new company
3. Prepare a Statement of Assets and Liabilities, certified by a Chartered Accountant (CA) or a Registered Valuer
4. No Objection Certificate from secured creditor along-with charge holder, if applicable
5. Criteria to have minimum number of shareholder and directors as per Companies Act:
   • Private Limited Company – minimum of 2 shareholders (members) and 2 directors
   • Public Limited Company – minimum of 7 shareholders (members) and 3 directors.

Procedure

1. Consent of All Partners
   Firm shall ensure obtaining a unanimous written consent from all of its partners, for the proposed conversion.
2. Obtain DSC and DIN
   All proposed directors of the Company must obtain a Digital Signature Certificate (DSC) and a Director Identification Number (DIN) (if they don’t have them already).
3. Name Reservation
   
   • File an application for name reservation through the RUN (Reserve Unique Name) form with the Registrar of Companies (ROC) under the Ministry of Corporate Affairs (MCA).
   • The new company’s name will usually be the same as the Firm’s name, but with the suffix “Private Limited” or “Limited”, as the case may be.
4. Public Advertisement
   
   • After name approval, publish a notice in Form URC-2 in two newspapers (one in English and one in the vernacular language) circulating in the district where the firm’s registered office is located.
   • This notice is to invite objections, if any, and a waiting period of 21 clear days is required after publication.
5. File Form for Conversion with ROC
   Once the public notice period is over, file the main conversion application in e-Form URC-1 with the ROC, along with numerous attachments, including:
   • Copy of the Partner’s Consent and the Partnership Deed
   • Statement of Assets and Liabilities, certified by a Chartered Accountant, prepared not more than 15 days before the application date
   • NOCs from Secured Creditors (or a declaration of no secured debt)
   • Copies of the Newspaper Advertisements
   • A declaration from all proposed first directors
   • Copy of the latest Income Tax Return of the Firm.
6. Company Incorporation (SPICe+ Forms)
   Simultaneously or shortly after, file the incorporation forms for the new company:
   • SPICe+ Part B (Simplified Proforma for Incorporating Company Electronically)
   • e-Memorandum of Association (e-MOA) and e-Articles of Association (e-AOA)
   • Other related forms like AGILE-PRO (for GST/EPFO/ESIC/Professional Tax registration).
7. Issuance of Certificate of Incorporation
   Upon successful verification by the ROC, a new Certificate of Incorporation (COI) will be issued. At this point, the Firm is deemed to be dissolved, and all assets, liabilities, and obligations are automatically transferred to the new Company.
8. Post Conversion Compliances
   
   • Inform the Registrar of Firms about the conversion and subsequent dissolution of the firm within 15 days of receiving the new COI.
   • Company shall:
     • Print the new MoA & AoA with the new Certificate of Incorporation
     • Paint or affix its name and address of its registered office outside every of its place of business and in legible letters
     • Have its name engraved in legible characters on its seal, if any
     • Get its name, address of its registered office, and Corporate Identity Number along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, billheads, letter papers, notices, and other official publications
     • Have its name printed on hundies, promissory notes, bills of exchange, and such other documents
     • Send the new address of its registered office to all the Banks, authorities, and other Basic Utility Service providers as applicable.
9. File Necessary Amendment Application under the following Acts:
   
   • Goods and Services Act
   • Shops & Establishment Act
   • Factories Act
   • Inter-State Migrant Workmen Act
   • Private Security Agency Act
   • Employees Provident Fund Organization
   • Employees State Insurance Corporation
   • Other Labour Laws
   • Industry-Specific Laws.

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