Updated on: Jun 20th, 2024
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2 min read
In this article, let us take a look at how to take a business partnership to the next level, and convert the business into a limited company. We will also understand the details required and the information vital to this transformation.
First of all, let us understand what a business partnership is. Any legal business relationship formed by the agreement of two or more individuals to carry out a business as co-owners of the company is called a business partnership. These co-owners (or partners) are individual investors in the company, and sometimes only a few of the partners work in the business.
In the context of an Indian business, there are three types of companies – public, private, and a one-person company. A business partnership can only be either for a private company or a public company. At this stage, let us see how to convert an existing business partnership into a limited company.
All the partners need to agree to form a company and then draft a company formation agreement. This is an official document, capturing all the information and details required to prove the partnership. This official document consists of:
This official agreement is legally valid in the court of law and every partner should retain a copy of this for further reference.