Conversion of Partnership to Public Limited Company

Conversion of Partnership to Public Limited Company - Process, Procedure, Document Required, Fees, Eligibility, Duration

In a Partnership, the liability is limitless. The partners' assets are also accountable in case of loss. A PLC, on the other hand, is a non-liability arrangement. A partner's liability in a PLC is limited to the agreed-upon amount of capital contribution. A PLC's partners cannot be held liable for the company's loss or debt. As a result, Partnerships convert to PLCs for reducing the liability.

Advantages of converting to Public Limited Company from Partnership

The following advantages will accrue to a Partnership that transforms into a Public Limited Company:

• The shareholders of a PLC are only liable for a portion of the company's assets. During the time of an unexpected liability, it would have no bearing on the shareholders as it would be limited to the firm.
• Shares in a PLC are made available to the general public, which implies that anyone can invest in a PLC. This leads to the rise of the capital of the company.
• Being listed on a stock exchange means that the company's operations are known to mutual funds, hedge funds, and other traders. This results in the greater business prospects for the PLC.
• A PLC is a separate legal entity with two distinct bodies: the company and the stockholders. In this regard, the company, as opposed to the shareholders, can have its PAN, bank account, license, and so on.
• PLC shares are easily transferable to other legal bodies without the agreement of other stockholders or the company itself. This implies that there is greater work independence in a PLC.
• A PLC continues to exist even when the company's shareholders die, retire, or exit. The absence of previous members has no bearing on the longevity of the Company.