Can Existing Company be converted into a Limited Liability Partnership?

A company is an association formed by people, whether living or artificial, with a motive to earn profit. It is a legal entity which has the power to ask money from outsiders in the form of shares, may it be privately owned or public. An existing company which is privately owned or unlisted company can be converted into a LLP after following a proper procedure, which is as follows:

i. Apply for the application of allotment of LLP in form 7.

ii. In case if some of the shareholders of the company already acquire a DIN, then they are new designated partners of LLP and they must have DSC for the LLP.

iii. Decide the name of the LLP and register it for the incorporation of LLP.

iv. The approval of the registrar is necessary keeping in mind the name does not resemble with the name of any existing body corporate, company or firm registered.

v. Application has to be made in the Form 1 for the availability of the proposed name and application fee is paid with a credit card.

vi. Application for conversion is to be made in form 18 and the following documents are to be attached with the application:

1. Statement of shareholders.
2. Incorporation document and statement filed in form 2 electronically.
3. Statement of assets and liabilities of the company duly attested by the chartered accountant.
4. List of all the creditors of the company along with their consent for the conversion.
5. Approval of governing council in case of professional private limited company.
6. No objection certificate from the Income Tax Authorities.
7. Particulars of any pending proceeding by the court or tribunal.
8. Rejection letter of the registrar in case of any prior conversion.
9. Particulars of conviction, ruling or any judgement by the court in favour or against of the private limited company.
10. Other documents asked by the registrar.

vii. In case the registrar is satisfied, then he will issue the certificate of conversion under the act.

viii. On the issue of the certificate, the new LLP must inform the registrar about the earlier registration of the private limited company within 15days.

ix. The LLP shall ensure for a period of 12months, the statement of conversion and name and registration number of the company, failing which will lead to penalty as prescribed by the authority.