Medium and large-scale or capital-intensive businesses, along with start-ups, find the conversion from LLP to a Private Limited Company suitable. This conversion enables them to raise outside funding easily, limit the liabilities of shareholders, and gives benefit of lower tax rates. In addition, it enables them to offer employee stock options to attract top talent.
A 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.
Moreover, a Private Limited Company is a type of business structure, which provides separation between ownership and management and provides flexibility in the transfer of ownership and management.
Further, a Private Limited Company may allow the induction of up to 200 shareholders, with shares that cannot be traded publicly. As a result, many LLPs are currently converting into Private Limited Companies to achieve greater growth and expansion.