The document provides information on converting a firm to a company under the Companies Act 2013. There are two main methods of conversion - forming a new company with the partners as shareholders, or converting the existing firm without dissolution by preparing deed provisions. The requirements for conversion include having a minimum of 7 members, consent of the majority or 3/4 members, and forming the company as unlimited, limited by shares, or limited by guarantee. The steps outlined include obtaining DINs, reserving a company name, publishing advertisements, and filing various forms along with documents before receiving a certificate of incorporation.

1. INDIA CS

2. C O N V E R S I O N
O F F I R M
T O
C O M P A N Y
COMPANIES ACT, 2013

3. APPLICABILITY
• Applicable Section and Rules : Chapter XXI, Part A, Section 366
to 374 read with The Companies (Authorized to Registered) Rules,
2014.
• Which entities are eligible to be converted??
• Partnership Firm
• Limited Liability Partnership (LLP)
• Cooperative Society, Society
• any other business entity formed under any other law for the
time being in force.

4. METHODS OF CONVERSION
• Form a new Company as per the
prescribed procedure under the
Companies Act, 2013 as a private or
public company and make the
partners of the firm the only
shareholders of the newly
incorporated company.
• See that the partners are the
subscribers to that company's
Memorandum of Association.
• Transfer all the assets & liabilities.
• Form a new Company as per the
prescribed procedure under the
Companies Act, 2013 with the
conversion form as prescribed under
the act.
• Without dissolution of the
partnership firm transfer the
business together with all the assets
and liabilities by preparing an
execution deed.
• There must be provision in the deed
for conversion.
By Making Partners Of The Firm As
Shareholders Of The Newly
Incorporated Company
By Conversion Of The Existing
Partnership Firm Without Dissolution

5. REQUIREMENTS
FOR
CONVERSION

6. • Minimum 7 members should be there at the time of conversion of company.
• An entity applying for the conversion may be converted into following type of
company:
 an unlimited company, or
 a company limited by shares, or
 a company limited by guarantee.
• it has a permanent paid-up or nominal share capital of fixed amount divided
into shares, and transferable as stock, or divided and held partly in the one
way and partly in the other, and formed on the principle of having for its
members the holders of those shares or that stock.
• Consent of majority of members by calling a general meeting for conversion.
• Where the firm is not having limited liability, and is about to be registered
as limited company, consent of at least three-fourth of the members present
in person or as proxy (if allowed) has to be taken.

7. STEPS FOR
INCORPORATION
OF COMPANY
UNDER PART XXI

8. NOTE:1. Hold a meeting of the partners/members to
transact the following business:
• To authorize one or more partners/members to take all
steps necessary and to execute all papers, deeds,
documents etc. pursuant to registration of the
firm/society/LLP as a Company.
• To execute a supplementary Partnership Deed or any
agreement as required to align it with the requirements as
under:
• There must be at least 7 partners/members in the
partnership firm/society/LLP;
• The firm/society/LLP must be registered.
• There must be a fixed capital divided into units.
• There must be provision of conversion.
• Execute a settlement deed.
• Approval for the draft of the advertisement to be given in
the Form URC-2 in the newspapers.
• There should not be revaluation of the assets in the
previous preceding three financial years.
You first need to identify as your
existing entity which is going to be
converted is having limited liability or
unlimited liability.
 In case of unlimited liability: Assent
of three-fourth persons/members is
required.
 In case of limited liability: Assent of
majority of persons is required.
 If you want to form a company
limited by guarantee, the assent
should be accompanied by a
resolution declaring that each
member undertakes to contribute to
the assets of the company, in the
event of its being wound up while he
is a member, or within 1 year after
he ceases to be a member, for
payment of the debts and liabilities
of the Company.

9. NOTE:2. Obtain the Digital Signatures Certificate
from authorized DSC issuing authority for the
proposed directors of the company.
3. Obtain the Director identification Number
(DIN) for every individual intending to be
appointed as a Director in E-form DIR-3.
4. After obtaining the DIN, an application for
name has to be applied in form INC-1 along
with prescribed fee of Rs. 1000/-.
5. After approval of name ROC will issue a Name
availability letter w.r.t. approval for
availability of name for a proposed company
which will be valid for 60 days.
DOCUMENTS FOR
APPLYING DIN:
 Copy of Passport/Voter
ID/Driving License/PAN
Card
 Scanned Photograph
For further details you can
watch our video on how to
apply DIN

10. CONTD.
6.
6. Publishing the Advertisement in Two Newspaper (English Daily and Vernacular)
• Publish an advertisement about registration in Form No. URC. 2, which shall be
published in a newspaper in English and in any vernacular language, circulating in
the district in which Limited Liability Partnership or the firm as the case may be
is situated. (The notice shall also be served to Registrar(LLP)).
• Seek any objections, if any within 21 clear days from the date of publication of
notice.

11. FORM URC-2

12. CONTD.
7. File E-Form URC-1 (Conversion Form) : On confirmation of name from Registrar, the
form has to be filed within 60 days of the reservation of name. There are some mandatory
attachments required under this form mentioned herein:
• Particulars of members/partners along with the details of shares held by them
• Declaration of two or more directors verifying the particulars of all members/partners
• Affidavit from all the members/partners for dissolution of the entity
• Copy of the instrument constituting or regulating the entity
• Copy of certificate of registration of the entity
• Copy of Newspaper advertisement (URC-1) and notice served to Registrar(LLP).
• Statement of accounts, prepared not later than fifteen days preceding the date of seeking
registration and certified by the Auditor together with the Audited Financial Statements
of the previous year
• Certificate from a CA/CS/CWA certifying the compliance with all the provisions of Stamp
Act, to the extent applicable.
• Consent of majority or 3/4th members as applicable.
• NOC from the concerned Registrar of LLP.

13. Enter the approved SRN
of e-Form INC-1 filed for
reservation of name.
Enter the Registration no.
if any.
Select type of entity
from the drop down
values and in case
others selected, specify
the entity in description
box .
Enter Number of
members. (Should be 7
or more than 7).
Enter the date of
constitution of entity
and details of deed
describing the same,

14. Enter the number of
shares taken up or the
consideration amount.
Enter the date of passing
the resolution and specify
the details for the same.
If there are any creditors,
the consent has to be
taken for the same.

15. Here all the attachments
required as per your condition
have to be annexed.

16. Declaration by Director and practicing
professional has to be annexed.
Press Check Form—Affix DSC—
Prescrutiny the Form and upload on
MCA.

17. NOTE
8. File Form INC-7, DIR-12 and INC-22 with
Form URC-1.
INC-7 : Application for incorporation
An application for incorporation has to be filed in INC-
7 giving details about all the directors and subscribers
of the converted company.
DIR-12 : Appointment of first Directors
This is a form stating the fact of appointment of the
proposed directors on the Board of directors from the
date of incorporation of the proposed company and is
signed by one of the proposed directors.
INC-22 : Verification of Registered Office
An application for submitting the proof of registered
office of the company has to be made with
incorporation or within 30 days of incorporation.
Attachments for INC-7
• MOA and AOA
• Declaration by Professional (INC-
8)
• Affidavit from the subscribers
(INC-9)
• Other proofs as required.
Attachments for DIR-12
• DIR-2
• Interest in other Entities.
Attachments for INC-22
• Proof of Registered Office(Rent
Deed, Purchase Agreement.)
• Utility Bill (Not old than 2 months)

18. CONTD.
9. On completion of the formalities, the Registrar shall register the
Company and issue a certificate of incorporation in the Form INC-
11.
10. An affidavit, duly notarized, from all the members or partners and an
intimation to provide that in the event of registration under Part
XXI, necessary documents or papers shall be submitted to the
registering or other authority(within 15 days) with which the
company was earlier registered, for its dissolution as partnership
firm, limited liability partnership, cooperative society, society or any
other business entity, as the case may be.
11. Now all the provisions of the Companies Act, 2013 will be applicable
from the date of registration as a company

19. EFFECT OF
REGISTRATION

20. • All property, movable as well as immovable belonging to or vested in the
company at the time of registration shall, on such registration pass to and
vest in the company as incorporated under this part.
• The Registration of a company under this part shall not in any manner affect
its rights or liabilities in respect of any debt or obligation incurred or any
contract entered into, by, to, with or on behalf of the company before
registration.
• All suits and other legal proceedings taken by or against the company or any
public officer or member thereof which where pending at the time of
registration may be continued in the same manner as if registration had not
taken place. However, no execution can be done against the property or
person of any individual member of the company on any decree or order
obtained in such suit or proceeding. If the property of the company is
inadequate to satisfy the decree or order, an order for winding up the
company may be obtained.

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