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+91 8600544422Company into Limited Liability Partnership
Any existing Private Limited Company can be converted into LLP as it is a popular form of business organization among entrepreneurs and professionals such as doctors, architects, engineers, lawyers etc. and provides the benefits such as no compulsion of audit, flexibility in operations, less compliance costs etc.
Starting at just ₹14999*/- (consultation fees)
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Introduction
A Company may convert itself into 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 favourable for small and medium-sized enterprises, organizations in the service sector, and professional firms. Any existing Private Limited Company or Unlisted Public Company can be converted into LLP by complying with the legal requirements under LLP Act 2008.
Advantages Of Converting a Company into LLP
- No Compulsion of Audit
There is no mandatory requirement for conducting statutory audit for LLP. Statutory Audit is mandatory only for those LLP where the turnover of LLP exceeds Rs 40 lakhs or where the contribution exceeds Rs 25 lakhs.
- Flexibility in operations
The partners of LLP are responsible for the day-to-day business affairs of the LLP unlike a company, LLP is governed by the LLP agreement which is drafted as per partners mutual consent, governing their rights and duties.
- Less Compliance burden
The compliances of LLP are relatively less than Private Limited Company. LLP is not required to appoint a mandatory auditor. However, LLP has to file its statement of accounts and annual return with ROC every year.
- Fewer Restrictions
In an LLP there is no limit on the maximum number of partners, as compared to a private limited company wherein there is a restriction on 200 members. Therefore, an LLP can induct unlimited partners. Further, there is no restriction on acceptance or grant of loans or investments by LLP, no prohibition on related party transactions.
Requirements For Conversion of Company to LLP
Every Shareholder of company shall become partner of LLP
Minimum 2 Designated Partners (At least 1 of the designated partners shall be an Indian Resident)
DIN/DPIN of 2 Designated Partners
DSC of Designated Partners
No pending forms for payment or processing in respect of the company.
No open (unsatisfied) charges / loans should be pending against the company or any proceedings at any Court/Tribunal.
Company should be having share capital
Company should not be a Section 8 Company (Section 25 as per old act)
At least one balance sheet and annual return should have been filed by the company after its incorporation
What Is Included In Our Conversion of Company into LLP package?
LLP name search and approval
Digital Signature Certificate (DSC) for 1 Designated Partner
Preparation of Documentation, papers, declaration, affidavit for conversion
Statement of Assets and Liabilities certified by auditor
Filing of Form 2 (FILLIP) and Form 18 with the ROC
Certificate of Conversion by Registrar of Companies (ROC)
LLP Agreement Drafting
Filing LLP Agreement with MCA in Form 3 of LLP
New PAN and TAN for LLP
Procedure for Conversion of Company into LLP
- Collection of required documents
In the very first step, the applicant has to send us the required documents of the existing company as per the checklist for the purpose of conversion. We will then verify the documents provided, check the eligibility of the entity for conversion and proceed towards the next step.
- Application for Name Approval
Applicant has to provide proposed name of LLP, main objects, name of partners, and all other relevant information of the existing company which shall be submitted to MCA for approval.
- Application for Digital Signature Certificate (DSC)
Once the name is applied, we shall apply the Digital Signature Certificate (DSC) of designated partners for digitally signing the forms. If the designated partners already have DSC, then this step can be skipped.
- Submission of Form for Conversion
After the name is approved and DSC is generated, we need to prepare and submit Form FILLIP and Form 18 along with other required documents for final approval to MCA.
- Get Certificate of Conversion
After successful submission of forms, we shall get the certificate of registration on conversion, which shall be a proof that the company has been converted into LLP.
- Submission of LLP Agreement
After conversion into LLP, all the partners should execute the LLP Agreement, and a copy of that LLP agreement is required to be filed with the ROC within 30 days from the date of incorporation/conversion of LLP. Stamp duty as per applicable rate has to be paid on such agreement.
- Change of Details in other registrations
After the Company is converted into LLP, we have to make changes in other registrations which were previously obtained by company such as PAN, TAN, GST, EPF, Professional Tax Registrations etc.
Documents Required for Conversion of Company into LLP
Certificate of Incorporation of Company
PAN and TAN of Company
- Memorandum of Association (MOA) and Articles of Association (AOA) of Company.
List of current shareholders of the company or copy of register of members
Consent of all shareholders for Conversion of Company to LLP
List of Creditors and their consent for Conversion of Company to LLP (if any)
Copies of Financial Statement, Auditor report, Income tax return (ITR) of the company previously filed
Pending Litigation against company (if any)
Statement of Assets and Liabilities of Company
Details of any dues towards Banks or Financial institutions, Income tax Dept, GST Dept, Central / State / Local Government Authorities.
KYC Documents such as PAN, Identity and Address proof of director and shareholder.
Utility bills such as Electricity bill, Water Bill, Gas Bill along with NOC from the owner of premises for office address of company.
Any other documents as may be prescribed
Effects of Conversion of Company into 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 company shall continue in the name of LLP
- Any conviction, ruling, order or judgment of any Court, Tribunal or other authority in favour 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..
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