Conversion From LLP to Company: Elevate Your Business Horizon
Seamlessly transition your LLP to a company for amplified growth. Enjoy limited liability, simplified ownership transfer and heightened credibility with our expert conversion service.
Overview
Reasons for Conversion of LLP into Company
- Separation between Ownership and Management: In a Private Limited Company, a clear separation exists between ownership and management, ensuring that a team of professionals with diverse skills necessary for effective company operations leads the management.
- Ease of transfer of ownership: Shares in a company can be easily transferred. However, in LLPs, it is difficult to do so, as each partner must agree to the sale.
- Credibility: A company has more legitimacy than LLP because it is a legal organisation.
- Access to capital: Companies had various alternative to raise fund to expand their business or invest further. LLPs, on the other hand, have more restrictions on how much money they can raise.
Key Drivers of Conversion of LLP into Company
- An LLP converts themselves into a Private Limited Company mainly for growth and extension of the existing business.
- An LLP can attract only a few investment opportunities, so to extend the funding and investment opportunities like foreign funding and equity funding they convert to Private Limited Company.
- LLP is converted into Private Limited to issue equity share capital.
- An LLP can be converted into Private Limited with the same brand name, therefore brand name and goodwill can be used to grow further.
Documents required
Rule 3, 4 and 5 of the Companies (Authorised of Registered) Rules, 2014 governs the process of conversion of any entities into Company.
S. No. | Documents |
1 | Copy of Partners Resolution |
2 | NOC from all creditors |
3 | Copy of all LLP Agreements |
4 | Copy of newspaper publication regarding conversion |
5 | Affidavits and undertaking |
6 | Latest ITR |
7 | Copy of latest statement of accounts certified by Auditor |
8 | Notice of conversion to the Registrar of Companies |
9 | List of Partners and Designated partner |
10 | All documents pertaining to incorporation in Spice+ |
Process of conversion
- Approval of all Partners to be accorded for conversion of LLP into Company through partners resolution.
- Name reservation application to be filed with the Central Registration Centre and seek approval for new name in Spice+ form.
- Application to the central registration centre in Spice+ along with E-MOA and E-AOA for conversion application.
- Apply for Director Identification Number (DIN) and Digital Signature Certificate (DSC).
- E form URC-1 to be filed along with Spice+.
- Publish a Public Notice.
- Obtain a No Objection Certificate (NOC) from all partners.
- After approval from Central Registration Centre, the Registrar shall issue certificate of incorporation in Form INC 11.
What is included in this
FAQs
A partnership that has been officially registered under the Limited Liability Partnership Act of 2008 and whose members have agreed to carry out a certain goal as stated in the Limited Liability Partnership Agreement.
A written agreement between the partners of a limited liability partnership (LLP) is known as an LLP agreement or limited liability partnership agreement. It describes the rules and regulations that will control the LLP as well as the partners’ rights and obligations.
| Particular | Limited Liability Partnership | Private Company |
| Act | LLP is governed by LLP Act, 2008 | Companies are governed by Companies Act, 2013 |
| Primary Document | LLP agreement | Memorandum of Association Article of Association |
| Name | Name shall have word “LLP” | Name shall have word “Private Limited Company” |
| Minimum number of partners/ directors | Minimum 2 Designated Partners | Minimum 2 Directors |
| Maximum number of partners/members | No limit on maximum partners | Maximum 200 members with exclusions given in definition |
| Books of Accounts | Within 6 months from end of financial year, prepare statement of asset & liability and shall be signed by designated partners | Within 6 months of end of financial year, prepare Balance Sheet and Profit and loss account to be adopted by members of the Company at Annual General Meeting |
| Annual Return | File E Form 11 within 60 days from end of financial year | File E Form MGT 7 within 60 days from the date of adoption of accounts at Annual General Meeting. AGM should be held prior to 30th September |
| Statement of Accounts/Financial Statement | File E Form 8 within 30 days of end of 6 months of closure of financial year i.e., upto 30th October | File E form AOC 4 within 30 days from the date of adoption of accounts at Annual General Meeting AGM should be held prior to 30th September |
- Consent of All partners is required
- Consent of secured creditor to be accorded and no objection is received from them in written.
- There shall be two or more members for the purposes of registration, a company with less than seven members shall register as a private company.
- Change in Sign Board, Letter head, stationary and other items of LLP.
- Application to update name in PAN.
- Intimation and application to other authorities where LLP is registered i.e. GST, EPF, ESI etc.
- Intimation to various suppliers and parties with whom LLP has business.
- Intimation to banks where LLP is maintaining bank accounts.
As per section 370 of the Companies Act 2013, all suits and other legal proceedings taken by or against the company, which are pending at the time of the registration of LLP, will continue in name of the new company.
As per section 368 of the Companies Act, 2013 all property, movable and immovable (including actionable claims), belonging to or vested in a company at the date of its registration shall, pass to and vest in the company as incorporated under this Act for all the estate and interest of the company therein.
