Can a Private Limited Company or LLP Buy Property in India? The Rules Before You Sign

"Can the company buy it, or should I buy it in my name?" I hear this question in two opposite moods. A founder whose business has outgrown a rented office asks it with excitement. A founder who has just been offered a "great plot" by a broker asks it with hope doing the thinking. The legal answer is the same in both moods: yes, a private limited company and an LLP can both buy property in India — companies and LLPs are legal persons that can own assets in their own names. But the purchase has to pass through the right internal approvals, the objects in your documents, the tax deduction at payment, and — for some kinds of land — hard prohibitions that no resolution can cure. This guide takes you through each gate before you sign anything.

Can a private limited company or an LLP buy property in India?

Yes. A company and an LLP can each buy and hold property in its own name. A company acts through a board resolution under section 179(3), after checking its memorandum permits the holding. An LLP acts under its LLP agreement, through its designated partners. The buyer must also handle TDS, stamp duty and registration.

The company route: what the board must do

Start with the memorandum, not the broker

A company can only do what its memorandum of association allows. Most modern memoranda carry a wide objects clause and an ancillary power to acquire and hold property for the business. Read yours anyway. If the property is the business — you are buying premises to trade from, a warehouse, a factory shed — a standard objects clause usually covers it. If the property is an investment unconnected to your stated objects, or worse, an agricultural plot bought "because it will appreciate", you may be outside the objects. Acting outside the memorandum is not a paperwork slip; it goes to whether the company had the power to do the act at all. If the objects need widening, that is a special resolution and an MGT-14 filing before the purchase, not an apology after it.

The board resolution under section 179(3)

Section 179(3) lists powers the board must exercise by resolutions passed at a board meeting. Two of them do the work in a property purchase: clause (d), to borrow monies — if a loan funds any part of the price — and clause (e), to invest the funds of the company. Buying a property is an application of company funds, and in practice the board resolution should say, in so many words: the property identified by its full description, the price and who the seller is, approval of the agreement to sell and the sale deed, the funding mix (own funds, borrowing, or both), and authorisation for named directors to sign, pay TDS, and appear before the Sub-Registrar. Banks and registrars ask for this resolution. So will your auditor. A vague one-line resolution naming no property helps nobody.

One relief worth knowing: private companies are not required to file board resolutions under section 117(3)(g) for section 179(3) matters with the Registrar. Keep the signed resolution in your minutes and statutory records regardless — "not filed with the ROC" never meant "not needed".

Where section 180 actually bites — and where it does not

Section 180 is quoted at buyers far more often than it applies to them. Read what it says. Section 180(1)(a) requires members' consent by special resolution to sell, lease or otherwise dispose of the whole or substantially the whole of an undertaking. That is the disposal side. It does not gate a purchase.

The section 180 limit that can touch a purchase is clause (c): borrowing. If the money to be borrowed, together with what the company has already borrowed, will exceed the aggregate of its paid-up share capital, free reserves and securities premium account — leaving aside temporary loans from its bankers in the ordinary course — the board needs a prior special resolution under section 180(1)(c), and that resolution must state the total amount up to which the board may borrow (section 180(2)). Debt taken beyond the limit is not valid unless the lender proves it lent in good faith and without knowledge that the limit was exceeded. So run the arithmetic before you sign the loan, not after. Note also that MCA exemption notifications have relaxed section 180 for many private companies over the years; whether your company can rely on an exemption depends on its articles and the conditions in the notification in force. Check your own position with your CS rather than assuming either way — this is a five-minute check that protects a crore-rupee transaction.

The LLP route: the agreement is your constitution

An LLP has no board and no memorandum. Its LLP agreement does that work. Before an LLP buys property, check three things in the agreement: that the LLP's business objects, as stated, cover holding the property for its business; which partners or designated partners are authorised to acquire assets and up to what value; and how capital contribution and borrowing decisions are taken. If the agreement is silent or restrictive, amend it first — a supplementary agreement, executed and filed in Form 3 within 30 days of the change — and then buy.

The designated partners sign and appear for registration, because they are the LLP's face to the regulator and are responsible for acts required under the LLP Act. Keep the partners' resolution or consent recorded in writing in the LLP's records, with the same particulars a good board resolution carries: property, price, seller, funding, signatories. An LLP buying property with borrowed money should also check the agreement's borrowing powers and any charge to be created. The discipline is identical to a company's. Only the vocabulary differs.

If you are still choosing between the two structures for a property-holding venture, our limited liability partnership service page and our private limited company service page each set out the formation steps; the property rules in this guide then apply on top of whichever you pick.

The land itself: where the answer can become no

Agricultural land is state law — and it varies

Whether a company or LLP may buy agricultural land is governed by state land and tenancy laws, not by the Companies Act. States differ sharply. Some restrict purchase of agricultural land to agriculturists, some require prior permission or conversion of land use before a non-agricultural buyer can hold it, and some bar companies from holding agricultural land for farming altogether. I will not give you a state-by-state table of figures here, because a wrong figure in a land deal is worse than no figure. Take the revenue record of the specific plot — its classification, the seller's title and eligibility, and the conversion position — to a local property lawyer in that state before paying a token amount. A plot recorded as agricultural in the revenue papers does not become commercial because the broker calls it a "farm plot near the highway".

The FEMA wall: foreign shareholding changes the question

If your company has foreign investment, a second wall appears. Under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 and the FDI policy they carry, foreign investment is prohibited in agriculture and plantation activities — with defined exceptions such as floriculture, horticulture, seed development, animal husbandry and cultivation under controlled conditions, and tea plantation treated separately — and in real estate business and construction of farmhouses. Separately, an NRI or OCI individual cannot buy agricultural land, plantation property or a farmhouse at all under FEMA's general permission; inheritance is the narrow exception.

What does that mean for a company with foreign shareholders eyeing land? It means the company cannot treat a purchase of agricultural land, plantation property or a farmhouse as a permitted use of foreign investment, and structuring the same purchase through an Indian-incorporated vehicle does not wash the prohibition away. Commercial, industrial and residential property for the company's own business stands on different footing. If there is any foreign money in your cap table and any farm, plantation or agricultural character to the land, stop and take FEMA advice before the agreement to sell — not after the advance is paid.

The money trail: TDS, stamp duty and registration

Two points on that table deserve emphasis. First, the TDS threshold: since the Finance Act, 2022 change, the 1% is computed on the higher of the sale consideration and the stamp duty value, and TDS applies if either figure is ₹50 lakh or more. A deal priced at ₹48 lakh on paper with a stamp duty value of ₹55 lakh is a TDS deal. Second, the NRI row. If your seller is non-resident, put this guide down and read the dedicated one: our explainer on TDS when buying property from an NRI covers the section 195 rates and the certificate route, and getting this wrong leaves the buyer liable for the seller's tax.

On stamp duty, I am deliberately not printing rates. They are set state by state, they change through state budgets, and several states levy different rates by property type and by whether the buyer is a company. Get the figure for your district and your deed from the state registration department's current schedule, and build it into the deal cost alongside registration charges before you negotiate the price — not as a surprise at the Sub-Registrar's office.

A pre-signing checklist that fits on one page

1. Title diligence done: chain of title, encumbrance certificate, revenue records, litigation and dues checked by a property lawyer.
2. Memorandum (company) or LLP agreement (LLP) checked: objects cover the holding; authority and limits are clear; amendments made and filed first if needed.
3. Board resolution (company, section 179(3)) or partners' written consent (LLP) passed, naming the property, price, seller, funding and signatories.
4. Borrowing test run: if loan-funded, section 180(1)(c) arithmetic checked and any special resolution passed with the borrowing ceiling stated.
5. Land character confirmed: agricultural or not; state-law eligibility and conversion position confirmed in writing.
6. FEMA check done if there is foreign shareholding or a non-resident party on either side.
7. TDS worked out: resident or NRI seller, correct section, PAN of seller collected, deposit calendar noted.
8. Stamp duty and registration charges confirmed from the current state schedule; funds arranged for the registration day.

Think of a property purchase like buying a second-hand car for the family, scaled up a hundred times. You check the RC book and the loan on it before you pay, not after — because after the money moves, every defect becomes your negotiation with someone who already has your cash. Title, authority and tax are the RC book of a property deal.

Mistakes that turn a good purchase into a bad year

• Buying in the company because "the company has money". Cash in the bank is not authority. Without the objects check and the resolution, the purchase is exposed inside the company itself.
• Forgetting the borrowing ceiling. The loan that funds the property can cross the section 180(1)(c) limit quietly when earlier borrowings are added. Run the total.
• No TDS because the price is "just under ₹50 lakh". If the stamp duty value is ₹50 lakh or more, TDS applies on the higher figure. Paper price is not the test.
• Treating agricultural land as a paperwork detail. State restrictions and, with foreign investment, FEMA prohibitions can make the purchase impermissible, not merely irregular.
• Registering first, resolving later. A resolution dated after the deed invites questions from auditors, banks and the Registrar that a timely one never raises.

DIY or professional help?

The internal approvals for a straightforward office purchase — clean title, resident seller, own funds, standard objects — are well within a competent company secretary's or founder's reach using the checklist above. Title diligence, agricultural land, any foreign-shareholding angle, and any NRI seller are not DIY territory. The fees for proper diligence are a rounding error next to the price of the property, and they are the only version of this purchase you can defend later.

If the purchase sits inside a larger plan — a new company or LLP to hold the asset, a restructuring, or a first commercial premises for a growing business — our private limited company service team can set up the vehicle and the paperwork in the right order, so the property lands in a structure that was ready for it.

Frequently asked questions

Can a private limited company buy property in its own name?

Yes. A company is a legal person and can own immovable property in its own name. The purchase should be approved by a board resolution under section 179(3), the memorandum's objects should cover the holding, and the deed is registered in the company's name through its authorised directors.

Can an LLP buy property?

Yes. An LLP can hold property in its own name. Authority comes from the LLP agreement: check that it permits the acquisition and names who may act, amend it by supplementary agreement filed in Form 3 if needed, and have the designated partners execute and register the deed.

Is a special resolution needed to buy property?

Not for the purchase itself. Section 180(1)(a) special resolution concerns selling or disposing of an undertaking. What can require a special resolution is the borrowing: under section 180(1)(c), if total borrowings would exceed paid-up capital plus free reserves and securities premium, members must approve the ceiling by special resolution first, subject to any private-company exemption your company can claim.

Can a company buy agricultural land?

It depends on the state. Agricultural land purchase is governed by state land laws, which vary — some restrict buyers to agriculturists or require conversion and prior permission. A company with foreign investment faces a further FEMA bar: FDI is prohibited in agriculture and plantation activities, barring defined exceptions. Take state-specific advice for the exact plot.

What TDS applies when a company buys property?

From a resident seller, 1% under section 194-IA (section 393(1) of the Income-tax Act, 2025 from 1 April 2026) where the consideration or the stamp duty value is ₹50 lakh or more, on the higher of the two, deposited through Form 26QB with Form 16B to the seller. From an NRI seller, section 195 applies instead, at higher rates.

Can a company with foreign shareholders buy a farmhouse or plantation?

Treat this as prohibited territory. FDI is not permitted in real estate business or construction of farmhouses, nor in agriculture and plantation activities outside defined exceptions, and FEMA bars NRIs and OCIs from buying agricultural land, plantation property and farmhouses directly. Take FEMA advice before committing any funds.