Procedure for Conversion of LLP into Company

There could be anyone of the reasons for conversion of existing LLP into Private Limited Company Registration

1. For the extension of the existing business
2. For issuance of equity share capital in the company and for increasing the investors in the company.
3. To avoid capital gain tax
4. To carry forward of unabsorbed losses and depreciation of last years.
5. For maintaining the brand name or goodwill of the existing entity.

Pre conditions for Conversion of LLP firm into Private Limited

1. LLP having two or more partners can be converted into private limited company. And in the case of public company minimum 3 partners are required
2. The LLP must have complied with all the applicable returns
3. The LLP should give newspaper advertisement in one English and in one vernacular language generally used in the locality of the registereted office regarding the conversion of the existing LLP into private limited.

Conversion process

Hold a meeting of the partners of existing LLP for the change of name of the LLP as well as to take consent of the partners for the conversion and to authorize any one partner for taking the necessary actions related with the conversion process.  In this process the existing name can be applied in RUN (reserve unique name) by using the suffix as “Private Limited”.

Following are the documents which are to be filed in form URC-1 related with conversion of LLP into private limited.

Case in which existing Limited Liability Partnership wants to convert into private company limited by shares

1. List of persons who were partners in the LLP and will be the shareholders after conversion. This list includes the amount of paid up capital of the proposed company, name, address, occupation, shares to be held by the proposed shareholders and the source of consideration (in cash or other than cash). Kindly note that this list should be latest and not older than six clear days prior to filling of application for conversion. This is to show that the persons shown in the list were the last partners of the LLP
2. List of the proposed persons who will be the first directors of the company
3. LLP agreement along with the supplementary deeds (if any) as well as the certificate of incorporation of LLP
4. No objection letters from the all secured creditors and partners of the LLP that they have no objection in this conversion
5. Undertaking from the persons who will be proposed directors of the company that they will comply with Section 2 of 1899 of Indian stamp act related with paying of stamp duty as applicable
6. The latest ITR filled for the existing LLP
7. A declaration duly signed by 2 or more proposed directors verifying the particulars of the partners
8. Affidavit by the partners of the LLP regarding the dissolution of existing LLP.
9. Copy of the newspaper advertisement and the objection raised by the secured creditors regarding this conversion
10. Balance sheet duly prepared not older than more than 15 clear days prior to filling of application for conversion
11. Certification letter by the professional certifying the stamp duty and compliances with all the applicable laws are duly being done.

Case in which existing Limited Liability Partnership wants to convert into private company limited by guarantee or an unlimited company   

1. List of persons who were partners in the LLP and after conversion will become the shareholders. This list includes the name, address, occupation, shares to be held by the proposed shareholders and the source of consideration (in cash or other than cash). Kindly note that this list should be latest and not older than six clear days prior to filling of application for conversion. This is to show that the persons shown in the list were the last partners of the LLP
2. List of the proposed persons who will be the first directors of the company
3. LLP agreement along with the supplementary deeds (if any) as well as the certificate of incorporation of LLP
4. No objection letters from the all secured creditors, partners of the LLP that they have no objection in this conversion
5. Undertaking from the persons who will be proposed directors of the company that they will comply with Section 2 of 1899 of Indian stamp act related with paying of stamp duty as applicable
6. The latest ITR filled for the existing LLP
7. Copy of the resolution declaring the amount of the guarantee
8. A declaration duly signed by 2 or more proposed directors verifying the particulars of the partners
9. Affidavit by the partners of the LLP regarding the dissolution of existing LLP
10. Copy of the newspaper advertisement and the objection raised by the secured creditors regarding this conversion
11. Balance sheet duly prepared not older than more than 15 clear days prior to filling of application for conversion
12. Certification letter by the professional certifying the stamp duty and compliances with all the applicable laws are duly being done.

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