The Government of India introduced the concept of Limited Liability Partnership in 2008 with an aim to provide a type of business that would combine the flexibility and seamlessness of a partnership firm and all the benefits of Private Limited Company like Limited Liability at comparatively low compliance cost. In short we can say that the constraints of Partnership Firm and the rigidity & stringency of Private Limited Company led the way for LLP in India.
Since then many Private Limited Companies have converted themselves into LLPs to enjoy the benefits of LLP.
If you are also conceiving of converting Private Limited Company into LLP then Blog will address all of your questions related to such conversion.
Table of Contents
Meaning: Conversion of Private Limited Company into LLP
Conversion of Pvt. Ltd. Company into LLP means the conveyance/transfer of all the assets, properties, rights, privileges, obligations, liabilities, interests, contracts and undertakings of Private Limited Company into an LLP.
Eligibility Criteria: Conversion of Private Limited Company into LLP
A Private Limited Company can apply for conversion into LLP under the LLP Act, 2008 only when the following eligibility criteria is met –
- There shall not be any security interest in the assets of company subsisting at the time of application of such conversion.
- All the shareholders of the company shall become the partners of the LLP after the conversion and except them no other person can become the partner of the LLP at the time of conversion.
Documents Required: Conversion of Private Limited Company into LLP
- Certified Copy of the MoA & AoA of the Company
- Certified copy of Board Resolution to convert a Private Limited into LLP
- Subscriber Sheet of the MoA & AoA
- Address Proof – Electricity proof + NOC
- Copy of Acknowledgement of latest ITR of Company
- List of shareholders of Company
- Audited Financial Statements for a period beginning from current financial year up to the date of Board meeting
- Certificate from CA that the company applying for conversion is not engaged in any NBFCs activity and it shall not be engaged in NBFCs after the conversion also
- Declaration from all directors of company that all the essentials of conversion of Private limited into LLP have been complied with
From Proposed Designated Partners –
- Consent Letter by all the proposed Designated Partners to act as designated partners of the LLP
- Self-Attested Identity Proof of all the designated partners – Driving License/ Passport/ Voter Id Card
- Self-Attested Address Proof –Bank Passbook [front page + Transactions]
- Self-Attested PAN & Aadhaar Card
Procedure: Conversion of Private Limited Company into LLP
- The first step is to serve the notice of Board meeting upon all the Board members of the company at least 7 days prior to the date of Board meeting.
- The notice must contain all the details related to the board meeting that is date, time, venue and subject of the meeting.
- Thereafter, a board meeting shall be conducted on the predetermined date and time whereby the proposal to convert the private limited into LLP shall be stated.
- Lastly, the following 2 Board Resolutions shall be passed in such Board meeting –
- Board Resolution for conversion of Pvt. Ltd. into an LLP.
- BR for authorizing any Director or CS or CA of the company for undertaking the process of conversion.
Obtain DSC (if required)
The second step is to obtain the DSC of all the members of the company who shall become the partners of the company as all the forms for conversion shall be signed digitally.
Name Reservation – RUN LLP
The next step is to apply for name reservation of proposed LLP and for this the RUN LLP form shall be filed with the MCA. The key point to note here is that the name shall end with the word LLP.
Filing of FiLLiP Form & Form 18
Once the name of the proposed LLP is approved, the applicant is required to file the FiLLiP Form along with Form 18 before the MCA for the conversion of Pvt. Ltd. into LLP.
Approval by the Registrar.
Subsequently, the Registrar shall examine the forms and on being satisfied that the forms are in compliance with the provisions of the LLP Act, 2008 and the Companies Act, 2013 then the Registrar shall accept the form and send the certificate of Incorporation to the applicant.
Intimate to the Registrar of Companies about the Conversion
Once the Registrar of LLPs has sent the Certificate of Incorporation then the next step is to intimate about such conversion to the Registrar of Companies within 15 days in Form 14 from the date of conversion.
Filing of LLP Agreement in Form 3
Thereafter, the LLP shall file the LLP Agreement by filing Form 3 within 30 days from the date of conversion before the MCA in a prescribed manner.
We hope all of your doubts related to conversion of Private Limited Company to LLP are answered. In case of any further query or for such conversion, feel free to contact Your Trustworthy Advisors Manthan Experts by just dialing at +91-9643-969-969.