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+91 8600544422LLP to Private Limited Company
Private Limited Company is one of the popular business organizations amongst startups and emerging business. Limited Liability Partnership (LLP) can be easily converted into a Private Limited Company and can avail various benefits like infusion of additional investors, separation between ownership and management etc.
Starting at just ₹14999*/- (consultation fees)
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Introduction
Conversion from LLP to Private Limited Company is suitable for medium and large-scale or capital intensive businesses, start-ups as it allows outside funding to be raised easily, limits the liabilities of its shareholders, has lower tax rates, and enables them to offer employee stock options to attract top talent. Limited Liability Partnership (LLP) registered in India with 2 or more partners can be converted into a Private Limited Company as per the provisions contained in Section 366 of the Companies Act 2013.
A Private Limited Company is a type of business structure, which provides separation between ownership and management, provides flexibility in the transfer of ownership and management. However, the private limited company may induct up to 200 shareholders and shares of which are prohibited from being publicly traded. Therefore, nowadays, many Limited Liability Partnerships (LLPs) are converting into a Private Limited Company for more growth and expansion purpose.
Advantages of Converting an LLP into Private Limited Company
- Enhanced Flexibility
A Private Limited Company offers flexibility in change of ownership and management in regards to process for addition or retirement of directors, allotment of new shares, transfer of existing shares, issue of ESOP/Sweat Equity shares etc. to the employees.
- Allocation of ownership and management to investors
Businesses that will require funding from venture capitalists (VCs), angel investors, etc need to register as private limited companies. This is because private limited companies can make them shareholders and offer them a seat on the board of directors, whereas LLPs would require investors to be partners.
- Preferred by banks, VCs & investors
As the private limited company’s books are mandatorily audited from independent auditor every year, therefore most of the Banks, VCs, and investors trust and prefer them over other forms of business.
- Separation between Ownership and Management
In Private Limited company there is a clear separation between ownership and management which ensures that management of company is headed by a team of professionals with the diverse skills necessary to effectively run the company.
- Lower Taxation Rates
A Private Limited Company with a lower turnover has to pay income tax at the rate of 25% on its profits, whereas LLP has to pay flat 30% tax on its income.
Minimum Requirements For Conversion of LLP into Private Limited Companies
Minimum 2 Partners of LLP to be shareholder/member of the Company
Minimum 2 Partners/Designated Partners of LLP to be Director of the Company (At least 1 of the director shall be an Indian Resident)
DIN/DPIN of Designated Partners
DSC of the Partners of LLP
Copy of Newspaper advertisement
Consent from majority of partners for conversion
Consent from secured creditors (if any)
No objection certificate from the concerned Registrar of Companies and LLP
Latest copy of Income Tax Return (ITR)
What is included in our conversion of LLP into Company Package
Company name search and approval
Digital Signature Certificate (DSC) for 2 Director/Shareholder
Preparation of Documentation, papers, declaration, affidavit for conversion into Company.
Certificate from a CA/CS/CWA certifying the compliance with all the provisions of Act
Filing of Form SPICE + and URC 1 with the ROC
Memorandum of Association (MOA) and Articles of Association (AOA)
Certificate of Conversion by Registrar of Companies (ROC)
PAN and TAN for the Company
Procedure for conversion of LLP into Company
- Collection of required documents
In the very first step, the applicant has to send us the required documents of the existing LLP as per the checklist. We will then verify the documents provided, check the eligibility of the entity for conversion and proceed towards next step.
- Application for Name Approval
Applicant has to provide proposed name of Company, main objects and any other relevant information of the existing LLP which shall be submitted to MCA.
- Application for Digital Signature Certificate (DSC)
Once the name is applied, we shall apply the Digital Signature Certificate (DSC) of directors/shareholders for digitally signing the forms. If the directors/shareholders 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 issue newspaper advertisement and then prepare and submit Form SPICE + and URC 1 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 conversion which shall be a proof that the LLP has been successfully converted into Company
- Change of Details in other registrations
After the conversion, we have to make changes in other registrations which was previously obtained by LLP such as PAN, TAN, GST, EPF, Professional Tax Registrations etc.
Documents Required for Conversion of LLP into Company
Certificate of Incorporation of LLP
PAN and TAN of LLP
LLP Agreement along with Supplementary Agreement
Consent of partners for Conversion of LLP
Consent of all shareholders for Conversion of Company to LLP
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
Digital Signature Certificate (DSC) of Designated Partners
Copies of Financial Statement, Auditor report, Income tax return (ITR) of the LLP previously filed
Pending Litigation against company (if any)
Written Consent / NOC from Secured Creditors (if any)
No objection certificate from the concerned Registrar of Firms or Registrar of Companies
Pending Litigation against LLP (if any)
Details / Statement of Assets and Liabilities of LLP
Details of any dues towards Income tax Dept, GST Dept, Banks or Financial institution, Central / State / Local Government Authorities.
Details of pending dues towards the Creditors, lender of the LLP
KYC Documents such as PAN, Identity and Address proof of director and shareholder.
Utility bill 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 LLP into Company
- All the moveable and immovable property including actionable claims held by the LLP shall vest in the company.
- All the rights and liabilities of the LLP in respect of any debt or obligation or contract entered into prior to such conversion shall continue in the name of the company.
- All the contracts entered into with various stakeholders’ viz., vendors, customers, service providers, consultants and employees shall continue upon conversion.
- All legal proceedings shall continue in the name of the new company.
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