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COMPANY FORMATION AND CONVERSION
Basic understanding
Possibilities
Options
By B C Shetty & Co. Chartered Accountants
Basic Understanding
 Company
 Partnership firm

 Limited liability partnership
Company
 A private limited or Public limited company
 Company registered under Companies Act 1956
 Either
 Limited by guarantee
 Limited by shares
 Separation of ownership from the management

 Management will declare operations to the owners on annual basis
 Management and owners are bound by the articles and memorandum of

company
 Company is bound to pay income tax either on straight basis or MAT (

minimum alternative tax)
 Profit declarations are once again subject to the dividend distribution tax in

the hands of the company
 Further whole of the profit cannot be withdrawn.
Partnership under partnership act 1932
 Registered under the act partnership act 1932
 Registration is not compulsory

 Unlimited liability of partners
 Owners are the managing partners unless otherwise as stated in the deed
 Partners are eligible for remuneration and interest subject to the terms of

deed
 Business profits can be withdrawn which are tax exempted
Limited liability partnership
 LLP is an alternative corporate business form that gives the benefits of









limited liability of a company and the flexibility of a partnership.
The LLP can continue its existence irrespective of changes in partners. It is
capable of entering into contracts and holding property in its own name.
The LLP is a separate legal entity, is liable to the full extent of its assets but
liability of the partners is limited to their agreed contribution in the LLP.
Further, no partner is liable on account of the independent or unauthorized actions of other partners, thus individual partners are shielded
from joint liability created by another partner’s wrongful business decisions
or misconduct.
Mutual rights and duties of the partners within a LLP are governed by an
agreement between the partners or between the partners and the LLP as
the case may be. The LLP, however, is not relieved of the liability for its
other obligations as a separate entity.
Partners are eligible to withdraw the remuneration, interest and profit
subject to the agreement
The profit of the LLP is taxable either on straight basis or at MAT rate.
Difference between company and firm


The major difference between companies and partnerships may be
considered under the following headings :
 Formation:
 A company is created by registration under the Companies

Act.
 A partnership is created by agreement which may be
express or implied from the conduct of the partners and is
subject to the Indian Contract Act and the Indian
Partnership Act. No special form is required , though
partnerships articles are usually written
 Status At Law:

 A company is an artificial legal person with perpetual

succession. Thus a company may purchase property , make
contracts and sue and be sued. It is an entity distinct from
its members.
 A partnership is not a legal though it may sue and be sued
in the firm’s name. Thus the partners own the property of
the firm and are liable for the contracts of the firm jointly as
well as severally.
Difference between company and firm
 Transfer Of Shares:
 Shares in a company are freely transferable unless the company’s

constitution otherwise provides; restrictions may , of course , appear in the
articles of a private company.
 A partner can transfer his shares in the firm , but the assignee does not
thereby become a partner and is merely entitled to the assigning partner’s
share of the profits.
 Number Of Members:
 A private company must have at least two members and maximum 50

members.
 A partnership cannot consist of more than 20 persons (10 persons in case
of banking business).
Difference between company and firm
 Management:
 Members of a company are not entitled to take part in the management of

the company unless they become directors.
 Partners are entitled to share in the management of the firm unless the
articles provide otherwise.
 Agency:
 A member of a company is not an agent of the company or that of other

members , and he cannot bind a company by his acts.
 Each partner is an agent of the firm and his partners, and nay bind the firm
by his acts.
Difference between company and firm
 Liability Of Members:
 The liability of a member of a company may be limited by shares or by

guarantee.
 The liability of a partner is unlimited.
 Powers:
 The affairs of accompany are closely controlled by the Companies Act, 1956

and the company can only operate within the objects laid down in the
memorandum of association, though these can be altered to some extent
by special resolution.
 Partners may carry on any business as they please so long as it is not illegal
and make whatever arrangements they wish with regard to the running of
the firm from time to time.
Difference between company and firm
 Last but not least: Termination:
 No one member of a company can wind up the company, and the death,

bankruptcy or insanity of a member does not mean that the company must
be wound up.
 A partnership may be dissolved by any partner at any time unless the
partnership is entered into for a fixed period of time. A partnership is also
dissolved by the death or bankruptcy of a partner.
Difference between LLP & “traditional partnership
firm”
 Under “traditional partnership firm”, every partner is liable, jointly with all the

other partners and also severally for all acts of the firm done while he is a
partner.
 Under LLP structure, liability of the partner is limited to his agreed

contribution. Further, no partner is liable on account of the independent or
un-authorized acts of other partners, thus allowing individual partners to be
shielded from joint liability created by another partner’s wrongful acts or
misconduct.
Difference between LLP & a Company
 A basic difference between an LLP and a joint stock company lies in that

the internal governance structure of a company is regulated by statute (i.e.
Companies Act, 1956) whereas for an LLP it would be by a contractual
agreement between partners.
 The management-ownership divide inherent in a company is not there in a

limited liability partnership.


LLP will have more flexibility as compared to a company.

 LLP will have lesser compliance requirements as compared to a company
Possibilities
 Start a Private Limited Company afresh and takeover the existing firm

 Start a Limited Liability Partnership afresh and takeover the existing firm
 Convert the firm to Limited Liability Partnership
 Convert the firm to private limited company
Start a Private Limited Company afresh and takeover
the existing firm
 Under this method :
 PVT LTD Company will be afresh

 Fresh shareholders
 Fresh management team
 Takeover the existing firm
 Consequences:
 The valuation of firm has to be carried out separately
 The newly formed company has to pay the consideration
 Attracts capital gain tax
 Dissolution of firm has to be separately carried out

 Business is considered to be stated afresh though there is purchase of

existing firm
Start a Limited Liability Partnership afresh and
takeover the existing firm
 Under this method :
 LLP will be registered afresh

 Fresh partners and designated partner
 Fresh management team
 Takeover the existing firm
 Consequences:
 The valuation of firm has to be carried out separately
 The newly formed company has to pay the consideration
 Attracts capital gain tax
 Dissolution of firm has to be separately carried out

 Business

is considered to be stated afresh though there is purchase of
existing firm
Convert the firm to Limited Liability Partnership
 Under this method :
 LLP will be registered afresh

 Existing firms’ partners
 Fresh management team
 With object of takeover and convert the existing firm
 A deed will be formulated and form part of the agreement and registration
 Consequences:
 The valuation of firm has to be carried out separately either at the book value or





market value
The newly formed company has to pay the consideration only to the extent of
shares/ capital outstanding
Does not Attracts capital gain tax, provided the > 50% of proportion of voting
right is maintained by existing partner/shareholders during next five years
Dissolution of firm will be carried out simultaneously
Business is considered to be converted with new legal entity with the base of
existing Firm
Convert the firm to private limited company
 Under this method :
 Private limited will be registered afresh

 With Existing firms partners as shareholders
 And Fresh management team
 With object of takeover and convert the existing firm
 A deed will be formulated and form part of the memorandum and registration
 Consequences:

 The valuation of firm has to be carried out separately either at the book value or





market value
The newly formed company has to pay the consideration in the form of shares
Does not Attracts capital gain tax , provided the > 50% of proportion of voting
right is maintained by existing partner/shareholders during next five years
Dissolution of firm will be carried out simultaneously
Business is considered to be converted with new legal entity with the base of
existing firm.
Options
 Takeover by company or LLP
 Cash flow to partners as consideration

 Attracts capital gain tax to firm
 Business in deemed to be suspended and started afresh
 Conversion to company or LLP
 ZERO cash flow to partners

 Consideration in form of shares
 Does not attract the capital gain tax subject to conditions
 Restriction of profit withdrawal and tax on dividend
 Existing Partners have work as directors for salary instead of remuneration

as in firm/ LLP
Options
 Convert the existing firm into private limited company

• Or
 Amend the existing partnership deed and then convert into the Private

limited company
Amend the existing partnership deed and then
convert into the Private limited company
Consequences:
 Amendment has to be intimated to the registrar of firms and other statutory
authorities like
 VAT & CST
 Professional tax
 Income tax assessing Officer etc
 The incoming partner has to bring the capital to the extent of share in the capital of
new company
 Two separate books has to be prepared
 Two separate assessment of Income tax will happen
 Deed of conversion has to be made upon the amendment of firm with consent all
partners
 Upon conversion and formation of company
 Pvt Ltd Company will be formed with base of deed of conversion
 Pvt ltd company will take over the firm
 Existing partners will become share holders in the ratio of their capital
 Business will be continued by the Pvt Ltd company
 All statutory registration- PAN , TAN, TIN/VAT, PT , S&E etc has to be afresh.
 Directors will get the salary only
 Shareholders will get the profit declared as dividend subject to dividend distribution
tax
 Separate Income tax assessment for shareholders and company

Convert the existing firm into private limited
company
 Consequences:
 Only one assessment of income tax for firm
 First shareholders are the existing partners
 Business will be transferred to new entity
 Upon conversion and formation of company
 Pvt Ltd Company will be formed with base of deed of conversion of existing

partners
 Pvt ltd company will take over the firm
 Existing partners will become share holders in the ratio of their capital
 ISSUE the shares subsequently to the new members and make then as
managing director
 The voting rights of first shareholders has to be maintained at

more that 50% in next five years
 All statutory registration- PAN , TAN, TIN/VAT, PT , S&E etc has to be afresh.
 Directors will get the salary only
 Shareholders will get the profit declared as dividend subject to dividend

distribution tax
 Separate Income tax assessment for shareholders and company
Requirement for formation & Conversion of
Company















Step 1
Hold a meeting of the partners to transact the following business
Assent of majority of its members as are present in person or where proxies are allowed,
by proxy, at a general meeting summoned for the purpose of registering the firm under
Part IX of the Companies Act, 1956. Since the liability of the members of the firm is
unlimited, when a firm desires to register itself as a company under Part IX as a limited
company, the majority required to assent as aforesaid shall consist of not less than ¾ of
the members as are present in person or where proxies are allowed, by proxy, at a general
meeting summoned for the purpose.
To authorize one or more partners to take all steps necessary and to execute all papers,
deeds, documents etc. pursuant to registration of the firm as a Company.
To execute a supplementary Partnership Deed to align it with the requirements as under:
There must be at least 2 partners in the partnership firm;
The firm may be registered with the Registrar of Firms;
There must be a fixed capital divided into units ;
There must be provision of converting a firm into company.
There must be an agreement by the partners to convert the partnership to a company.
This can be done by a contract in writing to this effect to which the partner’s resolution for
conversion can be attached as annexure.
Execute a settlement deed.
Requirement for formation & Conversion of
Company contd..


Step 2



APPLICATION FOR DIRECTOR’S IDENTIFICATION NUMBER AND DIGITAL SIGNATURERS
CERTIFICATE



Ministry of Company Affairs has made Director’s Identification Number mandatory for
each Director. Following details are required for DIN: Name(s) , Father’s Name(s),
Permanent Residential Address(s), Present Residential Address(s), Occupation, Name
of the Companies in which the promoter is Director/Promoter, Date of Birth , E-mail IDs
(Minimum 2 for private company).



Ministry of Company affairs have initiated the process of E-filing of the Documents,
wherein the either of the Director needs to have Digital Signature Certificate. For the
matter of Convenience in submission of documents with Registrar of Companies and
expediting the processing, it is advisable to obtain the Digital Signature Certificate from
prescribed authorities.



Following documents are required for DIN/Digital Signature: Copy of Passport/ Voter
ID/Ration Card/Driving License/ PAN Card/Telephone Bill/Electricity Bill/Bank Statement.



The application is required to be signed by the promoter(s).



Normally the process takes 2 working days after submitting the documents with DIN
Cell.
Requirement for formation & Conversion of
Company contd..


Step 4

Registration of Company
 On obtaining the approval of name , file the following documents with the
registrar of Companies within 60 days from the date of name approval
 Two sets of Memorandum and Articles of Association of the Company. One set shall be
duly stamped. A memorandum of association and articles of association may
be made for the company which will be similar in all respects to a normal
Memorandum and Articles of Association except that it incorporate therein terms of
settlement deed.
 After drafting The Memorandum and Articles of Association is required to be stamped
as per the Indian Stamp Act. (in Delhi its Rs. 200/- on MOA & 0.15% of Authorized
Capital on AOA).
 Thereafter these documents are required to be executed by the promoters in their
own hand in the presence of professionals after the date of Stamping of Memorandum
& Article of Association in duplicate stating their full name, father’s name, residential
address, occupation, number of shares subscribed for & Signature etc.
 Declaration by two partners verifying the particulars set forth in the above mentioned
documents.
 Consent letters from Directors
 Filing fees as may be applicable
 Other information to be submitted as may be specified

Requirement for formation & Conversion of
Company contd..
 Once the new company is formed, the takeover agreement would be entered

between the Partnership Firm and the newly incorporated company.
 Convene a Board Meeting after giving notice to all the directors of the newly

incorporated company immediately after incorporation as per section 286 of
the Companies Act, 1956 to adopt the agreement entered into by the
company and the partner of the firm for the acquisition of business of the
firm.
 In such a situation, the entire business of the firm along with all its assets and

liabilities is transferred to the company.
 The company may issue shares or other securities to the Partner of the firm.
 Upon the conversion and formation, convey board meeting to take effect of all

conversion and vesting of property and liability.
For B C Shetty & Co
Thank you

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Conversion of firm to llp and pvt. ltd. co.

  • 1. COMPANY FORMATION AND CONVERSION Basic understanding Possibilities Options By B C Shetty & Co. Chartered Accountants
  • 2. Basic Understanding  Company  Partnership firm  Limited liability partnership
  • 3. Company  A private limited or Public limited company  Company registered under Companies Act 1956  Either  Limited by guarantee  Limited by shares  Separation of ownership from the management  Management will declare operations to the owners on annual basis  Management and owners are bound by the articles and memorandum of company  Company is bound to pay income tax either on straight basis or MAT ( minimum alternative tax)  Profit declarations are once again subject to the dividend distribution tax in the hands of the company  Further whole of the profit cannot be withdrawn.
  • 4. Partnership under partnership act 1932  Registered under the act partnership act 1932  Registration is not compulsory  Unlimited liability of partners  Owners are the managing partners unless otherwise as stated in the deed  Partners are eligible for remuneration and interest subject to the terms of deed  Business profits can be withdrawn which are tax exempted
  • 5. Limited liability partnership  LLP is an alternative corporate business form that gives the benefits of       limited liability of a company and the flexibility of a partnership. The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name. The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP. Further, no partner is liable on account of the independent or unauthorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct. Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity. Partners are eligible to withdraw the remuneration, interest and profit subject to the agreement The profit of the LLP is taxable either on straight basis or at MAT rate.
  • 6. Difference between company and firm  The major difference between companies and partnerships may be considered under the following headings :  Formation:  A company is created by registration under the Companies Act.  A partnership is created by agreement which may be express or implied from the conduct of the partners and is subject to the Indian Contract Act and the Indian Partnership Act. No special form is required , though partnerships articles are usually written  Status At Law:  A company is an artificial legal person with perpetual succession. Thus a company may purchase property , make contracts and sue and be sued. It is an entity distinct from its members.  A partnership is not a legal though it may sue and be sued in the firm’s name. Thus the partners own the property of the firm and are liable for the contracts of the firm jointly as well as severally.
  • 7. Difference between company and firm  Transfer Of Shares:  Shares in a company are freely transferable unless the company’s constitution otherwise provides; restrictions may , of course , appear in the articles of a private company.  A partner can transfer his shares in the firm , but the assignee does not thereby become a partner and is merely entitled to the assigning partner’s share of the profits.  Number Of Members:  A private company must have at least two members and maximum 50 members.  A partnership cannot consist of more than 20 persons (10 persons in case of banking business).
  • 8. Difference between company and firm  Management:  Members of a company are not entitled to take part in the management of the company unless they become directors.  Partners are entitled to share in the management of the firm unless the articles provide otherwise.  Agency:  A member of a company is not an agent of the company or that of other members , and he cannot bind a company by his acts.  Each partner is an agent of the firm and his partners, and nay bind the firm by his acts.
  • 9. Difference between company and firm  Liability Of Members:  The liability of a member of a company may be limited by shares or by guarantee.  The liability of a partner is unlimited.  Powers:  The affairs of accompany are closely controlled by the Companies Act, 1956 and the company can only operate within the objects laid down in the memorandum of association, though these can be altered to some extent by special resolution.  Partners may carry on any business as they please so long as it is not illegal and make whatever arrangements they wish with regard to the running of the firm from time to time.
  • 10. Difference between company and firm  Last but not least: Termination:  No one member of a company can wind up the company, and the death, bankruptcy or insanity of a member does not mean that the company must be wound up.  A partnership may be dissolved by any partner at any time unless the partnership is entered into for a fixed period of time. A partnership is also dissolved by the death or bankruptcy of a partner.
  • 11. Difference between LLP & “traditional partnership firm”  Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner.  Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct.
  • 12. Difference between LLP & a Company  A basic difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 1956) whereas for an LLP it would be by a contractual agreement between partners.  The management-ownership divide inherent in a company is not there in a limited liability partnership.  LLP will have more flexibility as compared to a company.  LLP will have lesser compliance requirements as compared to a company
  • 13. Possibilities  Start a Private Limited Company afresh and takeover the existing firm  Start a Limited Liability Partnership afresh and takeover the existing firm  Convert the firm to Limited Liability Partnership  Convert the firm to private limited company
  • 14. Start a Private Limited Company afresh and takeover the existing firm  Under this method :  PVT LTD Company will be afresh  Fresh shareholders  Fresh management team  Takeover the existing firm  Consequences:  The valuation of firm has to be carried out separately  The newly formed company has to pay the consideration  Attracts capital gain tax  Dissolution of firm has to be separately carried out  Business is considered to be stated afresh though there is purchase of existing firm
  • 15. Start a Limited Liability Partnership afresh and takeover the existing firm  Under this method :  LLP will be registered afresh  Fresh partners and designated partner  Fresh management team  Takeover the existing firm  Consequences:  The valuation of firm has to be carried out separately  The newly formed company has to pay the consideration  Attracts capital gain tax  Dissolution of firm has to be separately carried out  Business is considered to be stated afresh though there is purchase of existing firm
  • 16. Convert the firm to Limited Liability Partnership  Under this method :  LLP will be registered afresh  Existing firms’ partners  Fresh management team  With object of takeover and convert the existing firm  A deed will be formulated and form part of the agreement and registration  Consequences:  The valuation of firm has to be carried out separately either at the book value or     market value The newly formed company has to pay the consideration only to the extent of shares/ capital outstanding Does not Attracts capital gain tax, provided the > 50% of proportion of voting right is maintained by existing partner/shareholders during next five years Dissolution of firm will be carried out simultaneously Business is considered to be converted with new legal entity with the base of existing Firm
  • 17. Convert the firm to private limited company  Under this method :  Private limited will be registered afresh  With Existing firms partners as shareholders  And Fresh management team  With object of takeover and convert the existing firm  A deed will be formulated and form part of the memorandum and registration  Consequences:  The valuation of firm has to be carried out separately either at the book value or     market value The newly formed company has to pay the consideration in the form of shares Does not Attracts capital gain tax , provided the > 50% of proportion of voting right is maintained by existing partner/shareholders during next five years Dissolution of firm will be carried out simultaneously Business is considered to be converted with new legal entity with the base of existing firm.
  • 18. Options  Takeover by company or LLP  Cash flow to partners as consideration  Attracts capital gain tax to firm  Business in deemed to be suspended and started afresh  Conversion to company or LLP  ZERO cash flow to partners  Consideration in form of shares  Does not attract the capital gain tax subject to conditions  Restriction of profit withdrawal and tax on dividend  Existing Partners have work as directors for salary instead of remuneration as in firm/ LLP
  • 19. Options  Convert the existing firm into private limited company • Or  Amend the existing partnership deed and then convert into the Private limited company
  • 20. Amend the existing partnership deed and then convert into the Private limited company Consequences:  Amendment has to be intimated to the registrar of firms and other statutory authorities like  VAT & CST  Professional tax  Income tax assessing Officer etc  The incoming partner has to bring the capital to the extent of share in the capital of new company  Two separate books has to be prepared  Two separate assessment of Income tax will happen  Deed of conversion has to be made upon the amendment of firm with consent all partners  Upon conversion and formation of company  Pvt Ltd Company will be formed with base of deed of conversion  Pvt ltd company will take over the firm  Existing partners will become share holders in the ratio of their capital  Business will be continued by the Pvt Ltd company  All statutory registration- PAN , TAN, TIN/VAT, PT , S&E etc has to be afresh.  Directors will get the salary only  Shareholders will get the profit declared as dividend subject to dividend distribution tax  Separate Income tax assessment for shareholders and company 
  • 21. Convert the existing firm into private limited company  Consequences:  Only one assessment of income tax for firm  First shareholders are the existing partners  Business will be transferred to new entity  Upon conversion and formation of company  Pvt Ltd Company will be formed with base of deed of conversion of existing partners  Pvt ltd company will take over the firm  Existing partners will become share holders in the ratio of their capital  ISSUE the shares subsequently to the new members and make then as managing director  The voting rights of first shareholders has to be maintained at more that 50% in next five years  All statutory registration- PAN , TAN, TIN/VAT, PT , S&E etc has to be afresh.  Directors will get the salary only  Shareholders will get the profit declared as dividend subject to dividend distribution tax  Separate Income tax assessment for shareholders and company
  • 22. Requirement for formation & Conversion of Company            Step 1 Hold a meeting of the partners to transact the following business Assent of majority of its members as are present in person or where proxies are allowed, by proxy, at a general meeting summoned for the purpose of registering the firm under Part IX of the Companies Act, 1956. Since the liability of the members of the firm is unlimited, when a firm desires to register itself as a company under Part IX as a limited company, the majority required to assent as aforesaid shall consist of not less than ¾ of the members as are present in person or where proxies are allowed, by proxy, at a general meeting summoned for the purpose. To authorize one or more partners to take all steps necessary and to execute all papers, deeds, documents etc. pursuant to registration of the firm as a Company. To execute a supplementary Partnership Deed to align it with the requirements as under: There must be at least 2 partners in the partnership firm; The firm may be registered with the Registrar of Firms; There must be a fixed capital divided into units ; There must be provision of converting a firm into company. There must be an agreement by the partners to convert the partnership to a company. This can be done by a contract in writing to this effect to which the partner’s resolution for conversion can be attached as annexure. Execute a settlement deed.
  • 23. Requirement for formation & Conversion of Company contd..  Step 2  APPLICATION FOR DIRECTOR’S IDENTIFICATION NUMBER AND DIGITAL SIGNATURERS CERTIFICATE  Ministry of Company Affairs has made Director’s Identification Number mandatory for each Director. Following details are required for DIN: Name(s) , Father’s Name(s), Permanent Residential Address(s), Present Residential Address(s), Occupation, Name of the Companies in which the promoter is Director/Promoter, Date of Birth , E-mail IDs (Minimum 2 for private company).  Ministry of Company affairs have initiated the process of E-filing of the Documents, wherein the either of the Director needs to have Digital Signature Certificate. For the matter of Convenience in submission of documents with Registrar of Companies and expediting the processing, it is advisable to obtain the Digital Signature Certificate from prescribed authorities.  Following documents are required for DIN/Digital Signature: Copy of Passport/ Voter ID/Ration Card/Driving License/ PAN Card/Telephone Bill/Electricity Bill/Bank Statement.  The application is required to be signed by the promoter(s).  Normally the process takes 2 working days after submitting the documents with DIN Cell.
  • 24. Requirement for formation & Conversion of Company contd..  Step 4 Registration of Company  On obtaining the approval of name , file the following documents with the registrar of Companies within 60 days from the date of name approval  Two sets of Memorandum and Articles of Association of the Company. One set shall be duly stamped. A memorandum of association and articles of association may be made for the company which will be similar in all respects to a normal Memorandum and Articles of Association except that it incorporate therein terms of settlement deed.  After drafting The Memorandum and Articles of Association is required to be stamped as per the Indian Stamp Act. (in Delhi its Rs. 200/- on MOA & 0.15% of Authorized Capital on AOA).  Thereafter these documents are required to be executed by the promoters in their own hand in the presence of professionals after the date of Stamping of Memorandum & Article of Association in duplicate stating their full name, father’s name, residential address, occupation, number of shares subscribed for & Signature etc.  Declaration by two partners verifying the particulars set forth in the above mentioned documents.  Consent letters from Directors  Filing fees as may be applicable  Other information to be submitted as may be specified 
  • 25. Requirement for formation & Conversion of Company contd..  Once the new company is formed, the takeover agreement would be entered between the Partnership Firm and the newly incorporated company.  Convene a Board Meeting after giving notice to all the directors of the newly incorporated company immediately after incorporation as per section 286 of the Companies Act, 1956 to adopt the agreement entered into by the company and the partner of the firm for the acquisition of business of the firm.  In such a situation, the entire business of the firm along with all its assets and liabilities is transferred to the company.  The company may issue shares or other securities to the Partner of the firm.  Upon the conversion and formation, convey board meeting to take effect of all conversion and vesting of property and liability.
  • 26. For B C Shetty & Co Thank you