Question

Explain the conversation of partnership firm into a private or public limited company ​

Answer 1

Answer:

Pre-requisites to Convert Partnership Firm to PLC

Should have 2 or more partners. NOC from all secured creditors. Further, all partners of the partnership firm shall become shareholders of the company in the same proportion in which their capital accounts stood in the books of the firm on the date of the conversion.

Answer 2

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.Before a conversion of a partnership firm into a private limited company or public limited company. They decide the conversion in following factors.

(a) Whether the company into which the partnership firm will be converted. It will form a private limited company or public limited company.

(b) Whether the partnership firm will be converted into a company by forming a new company. A new company will be formed and then admitted as a partner of an existing partnership firm.

(c) The deduction of tax under the income tax act 1961.

2. If you want to conversion a partnership firm into a company by way of forming a new company then you can:

(a) Make all the partners of your partnership firm become the subscribers to the note of the association. There are only shareholders of the new company.

(b) To form a new company and admit the new company as one of the partners of your existing partnership firm.

3. To form a new company follow the procedure is given under section( 7) of the companies act 2013.

4.If you are converting the partnership firm into a company by making all the partners of the firm. The only subscribers of the memorandum of association. The only shareholders of the new company as specified for conversion. The all existing partners of the partnership firm must only subscribe to the note of the association of the newly registered company and no one else.

5. If the new company is being registered as a public limited company then ensure that. The only subscribers being the partners of the firm are not to be less than seven. If the new company is being registered as a private limited company then ensure that. The only subscribers being the partners of the firm are not to be less than two in numbers.

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