Formation of part ix company

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akansha (Querist)
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03 November 2012 Respected Experts,
Kindly clarify a case of mine-
M/s ABC is a registered partnership firm carrying on the business of Pan Masala intends to convert itself into a private Company under the provisions Part IX of the Companies Act, 1956 with altogether new business activities such as manufacturing and dealing in food products.

So, whether a firm has to first incorporate change in its business activity (Modification in deed) then go for conversion or we can directly introduce altogether new Memorandum of Association during the the time of registration of Company.

Please give your valuable suggestions in both of the cases so that i can proceed.

Thanks,
CS. Akansha

Ajay Mishra

Ajay Mishra (Expert)
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03 November 2012 Hi

Procedure for the conversion of a Partnership into a company under Part IX:

1. Prepare a draft of Partnership deed which shall contain following details along with the other necessary details to regard the Partnership firm as an existing Joint Stock Company as per the provisions of Section 566 of the Companies Act, 1956;
a. Permanent paid up or nominal share capital
i of fixed amount divided into shares of fixed amount or
ii. held and transferable as stock or
iii. divided and held partly in one way and partly in the other way

The Fixed Capital mentioned in the Partnership Deed shall be the initial paid up capital of the company in order to meet the criterion of Minimum Paid up Capital as applicable to the company
b. The clauses of Main Object, Objects ancillary to the attainment of Main Objects and Other Objects
c. The Deed shall be entered into in between the persons who will be the proposed members of the company.
In order to convert the partnership into a company as per Part IX there should be at least 7 members/ subscribers to the Memorandum of Association of the proposed company.
2. File the Partnership Deed with the Registrar of Firms
3. Convene a Meeting of the Partnership Firm and pass the resolution for the conversion of the partnership into a company and for giving the authority to any two partners of the company to take the necessary steps for the proposed conversion.
4. Obtain DIN for the proposed directors
5. Obtain DSC for at - least two directors as Form 39 needs to be digitally signed by two directors
6. File Form No. 1A for the availability of Name with the concerned Registrar of Companies. The proposed name shall contain the name of the partnership firm, which is proposed to be converted into a Company under Part IX of the Companies Act. The Form shall be accompanied by the following documents;
a. Annexure containing the Main Object Clause
b. Certified copy of the resolution passed by the Partnership Firm along with the consent signed by all the partners to convert the said partnership into a Company (On the letterhead of the partnership firm)
c. Certified as true copy of the Minutes of the meeting held by the partnership firm for considering the proposal of conversion (On the letterhead of the firm) along with the names and signatures of the partners present at the meeting
d. Certified copy of Partnership Registration Certificate.
e. Certified copy of Income Tax Assessment Order. OR
Certified copies of Income Tax Return Acknowledgement.
f. Certified copy of latest balance sheet of the Firm.
g. Certified copies of BST Registration certificate of the Firm

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Ajay Mishra

Ajay Mishra (Expert)
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03 November 2012
After obtaining the Name Availability Letter, prepare Memorandum & Articles of Association and rest of the documents necessary for the purpose of proposed conversion
The Memorandum of Association shall contain
- the names of the subscribers/ members who shall execute the same as parties to the said document
- details of the existing activity carried on by the partnership firm
- details of all the partnership deeds entered into by the partners with effect from its formation along with the changes in the structure of the firm
- details of the resolution passed by the firm for converting the partnership into a limited company
- details of shares proposed to be acquired by the partners and their share in Profit/ Loss
- Name clause
- Domicile clause
- Main Objects, Ancillary Objects, Other Object clause (These clauses should be the same clauses which were mentioned in the Partnership Deed entered into between the partners for converting the firm into the existing joint stock company)
- Liability clause
- Capital clause
It is to be noted that the Memorandum of Association starts with the clause pertaining to the execution of the Memorandum of Association by the subscribers to it. While putting the date of such execution, following points should be considered;
a. The date should be any date after the date of stamping
b. The date should not be the date more than Six Clear Days before the date of registration as per Section 567 (a) of the Companies Act. Thus such date shall not be more than 6 clear days before the date of filing of all the documents with the concerned ROC.
c. The same date should be put on the subscription pages to the Memorandum and Articles of Association.
d. The same date shall be mentioned in Form 39
- at item no. 3 (a) - date upto which the shares have been taken up by the members
- at item no. 4 –date of List of members
6. Make Payment of stamp duty on the following documents and get all the documents signed from the authorized persons
- Form 1
- Form 37
- Form 39
- Memorandum and Articles of Association
7. Get form 18 and 32 duly certified by the Company Secretary/ Chartered Accountant/ Cost Accountant in whole time practice
8. Filing of documents
Following documents should be submitted to the concerned ROC for the purpose of getting proposed conversion.
i. Two copies of Memorandum and Articles of Association duly signed and stamped.
ii. Form No. 1 on a stamp paper of Rs. 100/-
iii. Form No. 18
iv. Form No. 32. (in duplicate)
v. Letter of Authority on a stamp paper of Rs. 100/
vi. Original Name Approval Letter.
vii. Form No. 37 on a stamp paper of Rs. 100/- along with a list of annexure
viii. Certified as true copy of all the Partnership deeds entered into by the partners with effect from the formation of such partnership till the date of conversion.
ix. Form No. 39 on stamp paper of Rs. 100/- along with list of members as annexure
x. An Affidavit on a Stamp Paper of Rs. 100/- for giving declaration that there or no legal suits pending against the partnership OR alternatively the declaration giving the list of the suits pending against the Partnership firm. Any two directors of the company shall sign the declaration. The affidavit shall have to be notarized from the Notary Public before submitting to the concerned ROC.
xi. Document evidencing payment of necessary registration fees to the Registrar of Companies
Copies of duly stamped e-form 1, 37 and 39 are required to be submitted physically to the concerned Registrar of Companies

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