Conversion of Company into LLP

A Company may convert itself into a Limited Liability Partnership (LLP) as it provides features of both a company and partnership, thereby providing more flexibility for business operations.

It provides benefits such as no compulsion of audit for below turnover of 40 lakhs, no limit on capping of borrowings and advancement of loans, no restriction on related party transactions, no requirement to maintain statutory registers, no compulsion on holding board meetings/general meetings, less compliance costs, etc.

It is generally favorable for small and medium-sized enterprises, organizations in the service sector, and professional firms. By complying with the legal requirements under the LLP Act 2008, any existing Private Limited Company or Unlisted Public Company can convert into an LLP.

• The private company shall be deemed to be dissolved and the name of the private limited company will be removed from the register of the Registrar of Companies.
• On conversion, all properties, assets, interests, rights, privileges, liabilities, and obligations of the private limited company are transferred to the LLP.
• On conversion, all the existing liabilities, obligations, agreements, contracts, and appointments of a company shall continue in the name of LLP
• Any conviction, ruling, order, or judgment of any Court, Tribunal, or other authority in favor of or against the company may be enforced by or against the LLP.
• Permits or licenses issued under any written law to the Private Limited Company, and which are active before the date of conversion will not be transferred automatically to the Limited Liability Partnership.
• The limited liability partnership shall mention in its official correspondence that it was converted from a company into an LLP and the name and registration number of the company from which it was converted for a period of 12 months from the date of registration.