Convert Partnership Firm to Pvt Ltd in India
Built for growth and corporate scale

TERMS & CONDITIONS

By subscribing to the above plans, you agree to abide by our following additional terms and conditions

1. Statutory Anchor — Section 366 / Chapter XXI Part I: Conversion of a Partnership Firm into a Private Limited Company is undertaken under Part I of Chapter XXI (Sections 366 – 374) of the Companies Act, 2013 read with the Companies (Authorised to Register) Rules, 2014, by filing Form URC-1 (Application for Registration as a Company) on the MCA portal — with Form URC-2 (Notice / Advertisement to the public) published in two newspapers (one English + one vernacular language of the State) at least 21 days before filing URC-1. On approval, the Registrar issues a fresh Certificate of Incorporation under Section 367 — the firm now legally exists as a Pvt Ltd under the Companies Act, 2013.
2. Partnership Act 1932 Anchor + Firm Registration: The Partnership Firm is governed by the Indian Partnership Act, 1932. While unregistered firms can also approach the URC-1 conversion route, registered firms (registered with the Registrar of Firms in the State + holding a Registration Certificate) have a smoother procedural path with fewer Registrar queries. Registration also enables enforceability of partner rights under Section 69 of the Partnership Act. We recommend registering the firm before conversion (if not already registered) — takes 7–15 days additionally.
3. All Partners Become Directors + Shareholders: Under Section 366 + the URC-1 framework, all existing partners of the firm typically become first directors + shareholders of the Pvt Ltd. Minimum 2 directors + 2 shareholders are required under the Companies Act, 2013. If the firm has 2+ partners, the requirement is auto-satisfied. Partners can later decide which of them serve on the board (others remain shareholders only) — we facilitate this restructuring as part of the conversion.
4. Capital Account → Share Capital Mapping (Critical): Each partner's capital account balance as on the date of the audited statement (not older than 30 days from URC-1 filing) is mapped into share capital of the Pvt Ltd via share allotment. Profit-sharing ratio + capital contribution typically determine final shareholding. Under Section 47(xiii) of the Income-tax Act, capital-gains exemption is contingent on all partners becoming shareholders in the SAME PROPORTION as their capital accounts immediately before conversion. Misaligned mapping = capital-gains tax exposure.
5. URC-2 Newspaper Advertisement Mandatory: Form URC-2 must be published in two newspapers — one in English and one in the principal vernacular language of the State / Union Territory where the firm is situated, at least 21 days before filing URC-1. The advertisement invites objections from creditors / members / public. Objections received during the 21-day window must be addressed before URC-1 filing. Advertisement costs vary by State + newspaper circulation (typically ₹4,500 – ₹18,000 total) and are pass-through at actuals.
6. URC-1 Documentation Pack: Form URC-1 application must be filed with: (a) list of all partners with addresses + occupations + capital contribution + profit-sharing ratio, (b) list of creditors with claims and consents / no-objection, (c) audited statement of accounts of the firm (not older than 30 days from URC-1 filing), (d) declaration of solvency signed by all partners, (e) unanimous consent of all partners for conversion, (f) URC-2 newspaper cuttings + objection-handling note, (g) affidavits by each partner, (h) proposed MOA + AOA, (i) Partnership Deed (original + registration certificate where applicable), (j) Form INC-9 (Declaration by each director + subscriber). We curate the entire pack as part of all plans.
7. Plan Scope — Migration Coverage: Elemental covers only the conversion (URC-1 + URC-2 + SPICe+ Part B + CoI). Enriched adds GST migration + corporate bank account + Udyam + MSME + INC-20A. Supreme adds statutory filings (ITR + AOC-4 + MGT-7A + ADT-1) + firm winding-up. Supreme Plus adds conducting the 1st AGM + filing all relevant forms to the ROC for the 1st FY + asset transfer agreement + license amendments (Shop & Estd / Trade License) + Trademark Assignment (TM-P).
8. Government Fees + Stamp Duty + Out-of-Pocket: MCA filing fee = ₹0 for authorised capital up to ₹15 lakh (per current SPICe+ tariff). URC-1 filing fee per MCA tariff (₹200 – ₹600). Stamp duty on MOA + AOA varies by State (₹500 – ₹12,600). URC-2 newspaper advertisement charges (₹4,500 – ₹18,000 typical). DSC issuance = ₹1,999 per DSC (vendor charges) for each partner-director. Stamp duty on Partnership Dissolution Deed (₹200 – ₹1,000) + Asset Transfer Agreement (₹500 – ₹3,000+). Affidavit + notarisation = ₹500 – ₹1,500. DPIIT Startup India recognition = ₹0 (Govt portal). All government fees + stamp duty + DSC + newspaper charges are billed at actuals on top of our professional fee.
9. GST on Our Fee: All quoted prices are exclusive of GST @ 18%, charged at checkout.
10. Section 47(xiii) Capital-Gains Conditions: Transfer of partnership firm assets to the Pvt Ltd is exempt from capital-gains tax under Section 47(xiii) of the Income-tax Act, 1961, subject to four conditions: (a) all assets + liabilities of the firm immediately before conversion become assets + liabilities of the Pvt Ltd, (b) all partners of the firm become shareholders of the Pvt Ltd in the same proportion as their capital accounts immediately before conversion, (c) partners don't receive any consideration / benefit, directly or indirectly, in any form / manner, other than by way of allotment of shares, (d) aggregate shareholding of all partners in the Pvt Ltd is not less than 50% of total voting power for at least five years post-conversion. Failure of any condition triggers retrospective capital-gains tax.
11. Asset / Liability Transfer (Supreme / Supreme Plus): Movable + fixed assets of the firm are transferred to the Pvt Ltd by way of an Asset Transfer Agreement (drafted by us in Supreme Plus). Stamp duty on the Asset Transfer Agreement is payable in the State of execution. A Partnership Dissolution Deed is executed post-CoI to formally close the firm.
12. Statutory Audit + AGM Mandatory: Unlike a partnership firm, a Private Limited Company is required to (a) conduct an Annual General Meeting under Section 96(1), (b) appoint a statutory auditor under Section 139 regardless of turnover / paid-up capital, (c) prepare full financial statements with a Cash Flow Statement, (d) file MGT-7 (full annual return). Annual compliance overhead is heavier than a partnership; this is factored into the Supreme and Supreme Plus plans.
13. Refund Policy: Full refund of professional fee (less ₹1,999 documentation handling) is available if SPICe+ Part B + URC-1 application is not submitted within 14 working days from receipt of all required documents + URC-2 publication clearance + DSC + government fees. Government fees, stamp duty, and DSC charges, if already incurred, are non-refundable.
14. Out-of-Scope Items: Full Income-tax restructuring (separately quoted), transfer pricing review for inter-entity transactions, customs / EXIM portfolio migration, complex ESOP / Sweat-equity plans, bank-loan restructuring, prior-year ITR re-filing of the partnership firm, complex creditor objections requiring litigation, RD approval applications for objections-not-resolved cases, FEMA / FDI structuring, partner dispute resolution prior to conversion, and litigation involving the firm's pending dues are NOT included in the base plans.