What are some key benefits/ reasons for conversion of a partnership firm into a company?

  • Investors prefer corporate structures over partnership firms.
  • The liability of the members or the directors are limited in case of a company whereas in case of partnership firm the liabilities are unlimited
  • A company is more transparent structure of business as compared to partnership firm
  • The benefit of startup recognition under the startup India scheme of the government of India can be availed by a company and not by any partnership firm.
  • The company has a separate legal identity as compared to a partnership firm.
  • There is a separation of ownership and management in a company, whereas in partnership firm, the partners are owners and the managers of the firm.