India has always been known as the land of Trade and Commerce. It is because of this fact that even today the country aims at achieving economic development by providing Company friendly laws, encouraging setting up of different form of business entities. The present Article provides provisions under Limited Liability Partnership Act 2008 and Companies Act, 2013 dealing with requirements and procedures required for the conversion of a Limited Liability Partnership into a Private Limited Company.

The Indian Law provides a variety of options for setting up of business enterprises. A person may choose setting up of a Limited Liability Partnership in order to restrict liability exposure, but after a time when the business has been perfectly established and is making profits, he may wish to convert LLP into a Private Limited Company for more growth in business or for infusing equity capital.

A Limited Liability Partnership has been defined under Section 3 of Limited Liability Partnership Act, 2008 as:

  1. Limited liability partnership to be body corporate.—(1) A limited liability partnership is a body corporate formed and incorporated under this Act and is a legal entity separate from that of its partners. (2) A limited liability partnership shall have perpetual succession. (3) Any change in the partners of a limited liability partnership shall not affect the existence, rights or liabilities of the limited liability partnership.

Whereas, a Private Limited Company has been defined under Section 2 Clause 68 of Companies Act, 2013 as: “private company” means a company having a minimum paid-up share capital 1 *** as may be prescribed, and which by its articles,— (i) restricts the right to transfer its shares; (ii) except in case of One Person Company, limits the number of its members to two hundred: Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:

Provided further that— (A) persons who are in the employment of the company; and (B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and (iii) prohibits any invitation to the public to subscribe for any securities of the company.

It is important to mention that LLP Act, 2008 does not provide provision for conversion of LLP into Company, but the Companies Act, 2013 under Section 366 provides provisions for conversion of LLP into Company.

Section 366 of the Companies Act, 2013 deals with Companies capable of being registered- deals with Part-I Companies which includes conversion of any partnership firm, limited liability partnership, cooperative society, society or any other business entity formed under any other law for the time being in force which applied for registration under this Part.

Essential Requirements for Conversion of LLP into Private Limited Company:

  • There must be at least 7 members in the said Firm or LLP. However, the Ministry of Corporate affairs has loosened the grip on limits of membership to 2 members for registration of other business entities as Private Limited Company under section 366 of the Companies Act, 2013.
  • The Partnership Firm or LLP should be a registered. In case it is not registered an application for registration shall be filed with the SDM having Jurisdiction over the district of the registered address of the partnership firm.
  • Approval for conversion of LLP into Private Limited Company by all the partners is required.
  • Advertisement in Local and National Newspapers.
  • No Objection Certificate (NOC) is required from the Registrar of Companies (ROC) where such LLP is registered.

Benefits of LLP conversion into company:

  • Continuation of Brand Value: Conversion of LLP into Private Limited Company enables business entities to continue the brand name without putting any additional efforts or advertisements.
  • Carry forward of unabsorbed losses and depreciation: The losses and depreciation incurred in LLP will be carried forwarded on conversion of entity, incurring no extra expenditure on book keeping.
  • ESOP’s to employees: Conversion enables Companies to offer stock ownership and ESOP plans. Which helps the company to attract employees as it creates incentive for them to work in the company.
  • Easy Fund Raising: Strict registration process makes the structure more credible among other which makes borrowing or fundraising from external sources easier.
  • Separate Legal Existence: The Conversion enables separate ownership and management to focus on their potential works. The Shareholders assign responsibility to operate and run the company without losing control in form of voting.
  • Limited Liability of Owners: Conversion of LLP into Private Limited Company restricts the liability of the owners only to the capital subscribed and unpaid by them.

Procedure for conversion of Limited Liability Partnership into Private Limited Company:


  • Step 1: Apply for issuance of No objection certificate from the concerned SDM having jurisdiction.
  • Step 2: Obtain availability of name under section 4 of Companies Act, 2013
  • Step 3: Publish advertisement in Form URC-2 in an English newspaper and in any vernacular language newspaper (seeking objections, if any within 21 days from publication) circulating in the district in which LLP situated after reservation of name.
  • Step 4: After twenty one days of publication of advertisement, file URC-1 along with the requisite SPICE Forms i.e. INC-32, INC-33, INC-34 etc. with the Registrar.
  • Step 5: File E-form URC-1 and attach documents as mentioned in the form as per Rule 3 & 4. The important ones are as mentioned below:
  1. No objection certificate from the concerned Registrar of Firms/LLP.
  1. Certificate from a CA/CS/CWA certifying the compliance with all the provisions of Stamp Act, to the extent applicable.
  1. Statement of accounts of the company, prepared not later than 30 days (*) preceding the date of application duly certified by auditor; if applicable.

Memorandum of  Association  and Articles of Association

On conversion of Limited Liability Partnership into Private Limited Company makes it mandatory for establishment of Memorandum of Association (MoA) and Article of Association (AoA) and then filed it with RoC after getting the name approval and sanction of Form no.- URC-1 from the registrar.

While drafting the MoA, the object of the company must include the object of conversion of LLP into Private Limited Company.

Filing of other e- Forms:

The Company for conversion is required to file e-forms INC-32, INC-33,INC-34 as linked forms along with e-form URC-1. The attachments in these forms are same as required while filing application of incorporation of normal companies such as MoA- AoA, DIR-12, INC-9, etc.

Documents required for conversion :

  • PAN Card- PAN Card of Shareholders and Directors, Foreign Nationals may provide a passport.
  • Identity Proof- Voter ID/ Driving License/Passport of Shareholders and Directors.
  • Address Proof- Telephone Bill /Electricity Bill/ Latest Bank Account Statement of Shareholders and Directors.
  • Photograph- Photograph of Shareholders and Directors.
  • Business Address Proof- Electricity Bill/ Telephone Bill of the registered office address.
  • Rent Agreement- Rent agreement of the registered office should be provided, if any.
  • Copy of ITR- A copy of the latest Income Tax return filed by the Limited Liability Partnership.

After due verification of all aspects of the application made for conversion of Limited Liability Partnership into Private Limited Company, a Certification of Incorporation will be issues by the Registrar of Companies.

Once registration under Section 366 of the Indian Companies Act, 2013 is obtained, information in this regard shall be given within 15 days of such registration to the concerned Registrar of Companies (LLP) under which it was originally incorporated and registered.

 Alternative Process:

The other option through which LLP can be converted to Private Limited Company is to establish a separate private limited company first and after that get the whole business (LLP) transferred to the private company with the help of a written agreement, in such case the restrictions mentioned above such as need for minimum 7 partners, newspaper publication, etc. are not needed to be met. However, in this case, there is a levy of capital gain tax. Stamp duty implication will also be applied to such transfer.


The passing of Amendment of Companies Act, 2017 has enabled conversion of Limited Liability Partnership to Private Limited Company. The Limited Liability Partnership Act, 2008 does not provide any facility for such conversion. Section 366 of the new Companies Act, 2017 provides provision and procedures for making such conversion. The new Amendment has opened the doors for progress and expansion of business entities.