Incorporation and investment

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This discussion explores the process of incorporating a new company from an existing LLP to secure a 20 lakh investment for a food preparation training project. The client plans to issue shares to the investor for cash and to existing LLP partners for technical knowledge. The recommended approach involves first incorporating the company, then issuing shares to the investor, and subsequently transferring the LLP's business and know-how to the new company with a registered valuation for non-cash share issuance.

shinu

shinu (Querist)
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12 December 2025 Sir,
We have a project of 50 lakh of a client.the business is training of food preparation..client is already having an llp.an investor is ready to fund for 20 lakh.the client is planning to incorporate a company by shareholder as llp and investor and existing partners of llp as directors.the shareholder other than investor is not bringing amount in cash.thy are intending to convert the technical knowledge to share .so how incorporation can be done.either first incorporate the company and then raise share capital by technical knowledge as consideration other than cash and investor amount.?pls guide.pls

Aashok Kumar Sharma

Aashok Kumar Sharma

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13 December 2025 You cannot directly convert “technical knowledge” into share capital without structure. The safest method is to first incorporate the company, then issue shares to the investor for cash, and thereafter transfer the LLP’s business/know-how to the company with a registered valuation and issue shares for consideration other than cash. This avoids MCA, tax, and future litigation risks.

shinu

shinu (Querist)
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14 December 2025 So while incorporating the company,we need not show the investor details as shareholders? Can incorporate with existing two directors and shareholder as llp and director?
The LLP has three partners ,they are being shown as director and llp as shareholder represented by a DP.is it ok?

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