Is it possible to convert a Pvt. Ltd. company into LLP

This query is : Resolved

Ganesh B (Querist)
Follow

08 July 2009 Dear Freinds,

Is it possible to convert a private limited company into LLP unit?

Please comments/suggestions.

Ankur Garg

Ankur Garg (Expert)
Follow

08 July 2009 Hi Ganesh,

Conversion of Private limited company into Limited Liability Partnership is very much possible.

Steps would be as under:
=========================
Step 1 : Decide the partner and designated partner

Step 2 : Obtain Designated Partner Identification Number (DPIN) & Digital Signature Certificate

Step 3 : Check name availability for LLP

Step 4 : Draft LLP Agreement

Step 5 : File Incorporation documents

Step 6 : File Conversion application

Step 7 : Certificate of registeration

Step 8 : Inform ROC

For more details visit www.iip.gov.in

Regards

Ganesh B

Ganesh B (Querist)
Follow

22 September 2009 Some more comments

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

01 August 2024 Yes, it is possible to convert a Private Limited Company into a Limited Liability Partnership (LLP) in India. The process involves several steps and compliance with legal requirements. Here’s an overview of how it can be done:

### **Conversion Process**

1. **Eligibility Criteria:**
- The Private Limited Company must be a going concern and not under any liquidation or insolvency proceedings.
- All shareholders and directors must consent to the conversion.
- The company should have no outstanding dues, including taxes and debts, that need to be cleared.

2. **Approval from the Board and Shareholders:**
- **Board Meeting:** Hold a board meeting to approve the conversion.
- **Special Resolution:** Pass a special resolution in the general meeting of the shareholders to convert the company into an LLP.

3. **Obtain Approval from the Registrar of Companies (ROC):**
- File an application with the ROC seeking approval for the conversion of the Private Limited Company into an LLP.

4. **Draft and File Conversion Documents:**
- **Form 18 (for conversion):** File Form 18 with the Ministry of Corporate Affairs (MCA), along with the necessary documents, including the special resolution, list of creditors, and other required documents.
- **Form 3 (for incorporation):** File Form 3 for the incorporation of the LLP, which includes details of the new LLP, partners, and the registered office.

5. **Obtain Certificate of Conversion:**
- Once the ROC processes and approves the application, a certificate of conversion will be issued. This certificate serves as proof that the Private Limited Company has been converted into an LLP.

6. **Update Records and Compliance:**
- Notify all stakeholders, including banks, clients, and vendors, about the conversion.
- Update the records with various authorities, such as tax authorities and other relevant departments.

### **Key Considerations**

- **Tax Implications:** Conversion of a Private Limited Company to an LLP may have tax implications, including the treatment of accumulated profits and the impact on capital gains. It is advisable to consult a tax advisor for guidance.
- **Continuity of Business:** The LLP will inherit all the assets, liabilities, and legal obligations of the company. Ensure that all contracts, licenses, and registrations are updated to reflect the new entity status.
- **Legal and Compliance Requirements:** Ensure compliance with all legal and regulatory requirements during and after the conversion process.

### **Documents Required**

1. **Board and Shareholder Resolutions:** Approving the conversion.
2. **Form 18:** Application for conversion of a company into LLP.
3. **Form 3:** Incorporation of the LLP.
4. **List of Creditors:** To show that all creditors have been notified and that their dues have been settled.
5. **PAN Card and Address Proof of Partners:** For the new LLP.

### **Reference**

- **Ministry of Corporate Affairs (MCA) Website:** For detailed guidelines and the latest forms required for conversion.

By following these steps and ensuring compliance with all legal requirements, you can successfully convert a Private Limited Company into an LLP. Consulting with a professional, such as a company secretary or legal advisor, is recommended to ensure a smooth conversion process.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now