Sections 366 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Part I of Chapter XXI (sections 366 to 374) lets an existing business entity, such as a partnership firm, LLP, cooperative society, society or other entity formed under another law, register as a company under the Companies Act, 2013. The Part says who can register, what happens to property and liabilities, how pending cases continue, and what the entity must do first, including getting secured creditors' consent.
Under section 366, "company" for this Part includes any partnership firm, LLP, cooperative society, society or other business entity formed under any other law that applies for registration. A body with two or more members may register as an unlimited company, company limited by shares or company limited by guarantee; a body with fewer than seven members must register as a private company. On registration, the property vests in the new company and existing liabilities continue (sections 368 and 369). Section 374 requires secured creditors' consent or no-objection, two newspaper notices and a notarised affidavit from members or partners.
Who can register: section 366
Sub-section (1) gives the widened meaning of "company" for this Part: any partnership firm, LLP, cooperative society, society or other business entity formed under any other law which applies for registration.
Sub-section (2) allows a body formed before or after the Act, under an Act of Parliament or any other law, or otherwise duly constituted, and "consisting of two or more members" (substituted in 2018 for "seven or more"), to register under this Act, at any time, as an unlimited company, a company limited by shares or a company limited by guarantee, in the prescribed manner. The registration is not invalid merely because it is made with a view to winding up.
The provisos set the limits:
| Proviso | Rule |
|---|---|
| (i) | A company registered under the Indian Companies Acts of 1882 or 1913 or the Companies Act, 1956 cannot register under this section |
| (ii) | A company whose members' liability is limited by another Act or law cannot register as an unlimited company or a company limited by guarantee |
| (iii) | Registration as a company limited by shares only if it has a permanent paid-up or nominal share capital of fixed amount divided into shares of fixed amount (or held as stock), with the shareholders as its only members |
| (iv) | Needs the assent of a majority of members present in person (or by proxy, if allowed) at a general meeting summoned for the purpose |
| (v) | If a company without limited liability is to register as a limited company, the majority must be not less than three-fourths of the members present |
| (vi) | For a company limited by guarantee, the assent must come with a resolution that each member undertakes to contribute to the assets, within the stated limit, if wound up while a member or within one year after ceasing to be one |
| (vii) | Inserted in 2018: a company with less than seven members shall register as a private company |
Sub-section (3) says that where a poll is demanded, the majority is computed by reference to the votes each member is entitled to under the regulations. Anyone thinking of moving an existing firm or society into company form should read this alongside how to convert a partnership firm into a private limited company and our private limited company registration page.
Sections 367 to 370: certificate, property, liabilities, cases
- Section 367: on compliance with the Chapter and payment of fees under section 403, the Registrar certifies under his hand that the company is incorporated under this Act (and, if limited, that it is limited), and thereupon it is so incorporated.
- Section 368: all property, movable and immovable, including actionable claims, belonging to or vested in the company at registration passes to and vests in the company as incorporated under this Act.
- Section 369: registration does not affect rights or liabilities on any debt, obligation or contract before registration.
- Section 370: suits and proceedings by or against the company pending at registration continue as if registration had not taken place. However, execution shall not issue against an individual member's property or person; if the company's property is insufficient, an order may be obtained for winding up "in accordance with the provisions of this Act or of the Insolvency and Bankruptcy Code, 2016" (words inserted in 2016).
Section 371: effect of registration
- Existing Acts and instruments that constitute or regulate the company, including a guarantee resolution, are deemed to be conditions and regulations of the company, treated as the memorandum or articles according to their content (sub-section (2)).
- All provisions of the Act apply as if formed under it, subject to exceptions: Table F does not apply unless adopted by special resolution; numbering of shares rules do not apply to companies whose shares are not numbered; and in winding up, persons liable for pre-registration debts are contributories for those debts (sub-section (3)).
- Provisions on registering an unlimited company as limited, and on reserve capital, apply despite any other law or instrument (sub-section (4)).
- The company cannot alter provisions that would have had to be in the memorandum and are not alterable under the Act (sub-section (5)); except for section 242, the Act does not derogate from powers of altering constitution held under other laws or instruments (sub-section (6)).
- "Instrument" includes a deed of settlement, deed of partnership or limited liability partnership (sub-section (7)).
Sections 372 and 373: protection after a winding-up petition
Section 372 extends the stay of suits against the company, after presentation of a winding-up petition and before an order, to suits against any contributory where a creditor applies. The provisions of the Act or of the IBC, "as the case may be", apply (words inserted in 2016). Section 373 provides that once a winding-up order is made, or a provisional liquidator is appointed, no suit or legal proceeding shall be proceeded with or commenced against the company or any contributory for a company debt, except by leave of the Tribunal and on its terms.
Section 374: what the entity must do
| Clause | Requirement |
|---|---|
| (a) | Ensure secured creditors, before registration, have consented or given no objection |
| (b) | Publish in a newspaper an advertisement, one in English and one in a vernacular language, in the prescribed form, giving notice of registration and seeking objections, and address them suitably |
| (c) | File an affidavit, duly notarised, from all members or partners that necessary documents will be submitted to the registering authority for dissolution as a firm, LLP, cooperative society, society or other entity |
| (d) | Comply with such other conditions as may be prescribed |
The proviso (inserted in 2018) says that on registration of an LLP under this Part, the LLP is deemed dissolved under the LLP Act, 2008 without any further act or deed.
A firm or society that skips creditor consent or notice risks objections and a stalled registration. Our private limited company registration team can help you plan the steps and papers.
Proposed change (Corporate Laws (Amendment) Bill, 2026)
Clauses 81 and 82 of the Bill are pending and not law as on 30 September 2026. Clause 81 would insert ", any non-trading company" after "co-operative society, society" in section 366(1). Clause 82 would amend section 374(c): "an affidavit, duly notarised" would become "a declaration, in such form as may be prescribed", and ", any non-trading company" would be inserted after "co-operative society, society". Until enacted and notified, the affidavit and the present list apply.
Need help converting an existing entity into a company?
Moving a firm, LLP or society into company form involves member resolutions, creditor consent, newspaper notices and closing the old registration. Our private limited company registration team can help you sequence the work.
Key takeaways
- Section 366 covers firms, LLPs, cooperative societies, societies and other entities formed under other laws.
- Two or more members can register; fewer than seven means a private company.
- Property vests and liabilities continue after registration.
- Section 374 needs secured creditor consent, English and vernacular notices, and a notarised affidavit today.
- The Bill 2026 would add "non-trading company" and replace the affidavit with a prescribed declaration; it is pending.
Read next
- Summary procedure for liquidation: sections 361–365
- Winding up of unregistered companies: sections 375–377
- How to convert a partnership firm into an LLP
- How to convert an LLP into a private limited company
Disclaimer: Based on the Companies Act, 2013 as amended up to 1 April 2021 (official consolidated text), read with later developments noted in the article; proposals in the Corporate Laws (Amendment) Bill, 2026 are pending and not law as on 30 September 2026. Verify current notifications and rules before acting.