Agreement among partners of a partnership firm for formation of a company

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WE PRESENT
AGREEMENT AMONG PARTNERS OF A PARTNERSHIP FIRM
FOR FORMATION OF A COMPANY
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Responsibility of incorporation
The responsibility of incorporating a new company
can be given to one of the parties or to all the
parties jointly. Normally it is given to one of
the parties, whereas other aspects of
registration are taken care of by the remaining
parties to agreement.
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New company incorporation
If the new company is registered as a public
limited company the only members are being the
firm partners and they are should not be less 7
in number. If the new company is formed as a
private company, the only subscribers being the
partners of the firm should not be less than two.
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Subscribers shareholding

• Subscribers must agree to take at least one share
  each in the MOA initially, but they can also
  agree to take more than one share under section
  2(68) of the act 2013. A private limited
• company may have such amount of minimum paid-up
  share capital as may be mutually decided by the
  subscribers as need of having Rs.1 lac as
  minimum paid-up share capital has been dispensed
  with.

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Denomination of shares

• Shares may be comprising of denomination of Rs.10
  or Rs.100 or of any denomination, but should not
  be less than Rs.1 per share.
• Denomination of shares can be decided by and
  between the promoters before entering into this
  agreement suitable to their purpose or needs at
  a later date.

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Classification of shares
Section 43 of the 2013 act allows share capital
of a company limited by shares to be of two
types equity share capital and preference share
capital.
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Preliminary Scheme
Appointment of Directors Directors can be
appointed by the articles of association of a
company or where no condition is made in the AOA
for the appointment of first director. The
subscribers to the memorandum who are
individuals shall be considered to be the first
directors of the company until the directors
are duly appointed.
Availability of name First and Foremost a name
should be made available from the ROC.
Subscribers may avail the name and
simultaneously incorporate a new company by
creating an application electronically in a
single integrated e- Form INC-29 with a fee of
Rs.2000/- to be paid both online and offline.
Before entering into this agreement, the four
partners should have a preliminary scheme for
conversion into a company the business carried
on by the partners. This scheme should contain
all the conditions relating to name- share
capital, MOA, first directors of the company,
sale business of the partnership firm, payment
of purchase price etc.
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Draft Agreement among partners of a partnership
firm for formation of a company to need their
business of partnership
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Whereas the parties have agreed to form a
company to be registered under the act 2013 for
the purpose of acquiring as a going concern the
business of legal and financial
consultancy. Whereas the parties have in
principle made up their mind to carry on the
business in the same way, only through a
registered company to take advantage of limited
liability.
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NOW, THEREFORE IT IS HEREBY AGREED AS FOLLOWS
The parties shall forthwith procure from the ROC
in Chennai (the incorporation of a private
company limited by shares (referred to as the
company) having an authorized share capital of
Rs.5 lakhs divided into 25,000 equity shares of
Rs.10. The valuation of the business of the said
partnership together with its assets, stock in
trade and goodwill containing book debts but
subject to liabilities will be gained from CA of
the said partnership firm. The equity and
preference shares in the company capital will be
assigned to the parties. The consent of the
creditors has been gained by the partnership
firm for company registration.
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The company shall be called ABC Company Private
Limited or ABC Consultancy Private Limited or
ABC Financial Services Private Limited or ABC and
Company Private Limited whichever name is made
available by the ROC.
Mr. RST, Mr. PQR and Mr.XYZ shall be the first
directors of the company quickly after
incorporation and registration. Thereafter, the
company directors shall be appointed as per the
conditions of section 152 of the act. The maximum
number of company directors shall not exceed 15
which may further increase by special resolution.
Immediately upon company registration, after the
business of the partnership firm is transferred
to the company. The partnership firm shall stand
dissolved and no party shall have any liability
against one another.The association shall be the
first directors of the company quickly after
registration and incorporation. So, the company
directors shall be appointed under section
152. The maximum number of company directors
shall not increase 15 as mentioned in section 149.
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The company shall after its registration make
simultaneous allotments of shares to be allotted
to them respectively in accordance with the
conditions of the sale agreement.
The initial expenses need for company
registration will be contributed by the parties
in proportion to their shareholdings in the
company.
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Nothing herein included shall in any way affect
the free exercise by any person of his powers as
a company director.Any pending litigation
against the name of the partnership firm would
be transferred against the company ans shall be
proceeded or defended with by the company or its
name through the authorized representative.After
registration, the company shall adopt this
agreement in this first board meeting held
thereafter.
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