LLP to Private Limited Company |

Procedure for conversion of LLP to Private Limited Company

There are businesses in India who begin their journey as a Limited Liability Partnership (LLP), but now are keen on converting into a private limited company for more growth and prosperity in business. Provision mentioned in the Section 366 of the Companies Act, 2013 and Company (Authorised to Register) Rules, 2014, says that an LLP can be converted into a Private limited Company.

Points to be considered for conversion of registered partnership to Private Limited Company:

Check whether LLP has filed its statutory returns upto date and filed all LLP agreements including supplementary agreements with Registrar of Companies (“RoC”).

All filed forms should be in the approved status, If not, complete all filings prior to start conversion procedure.

The amount of contribution shall be equal to amount of capital and there cannot be change in such amount

All the partners shall become the shareholders of the Company.

Benefits of Conversion of LLP into Private Limited Company

No Capital Gains tax on transfer of property.

Carry Forward Of Unabsorbed Losses And Depreciation

Preservation Of Brand Value

Easy Fund Raising

Separate Legal Existence

Limited Liability of Owners

Documents required for conversion of LLP to a Private Limited Company

Identity and Address Proof of Directors and Shareholders

Passport size photographs of the directors

Copy of Aadhar Card

Copy of Driving License or Voter ID or Passport

Copy of PAN Card

Copy of bank statement or electricity bill or mobile bill (not older than two months)

Copy of Passport (in case of foreign national or NRI)

No Objection Certificate to be obtained from all the secured creditors (if any) of the applicant

Written consent or no objection declaration from partners of the firm

For the Registered Office:

Scanned copy of Latest Telephone or Electricity or Gas Bill or Water bill

Scanned copy of Notarized Rental Agreement in English

Scanned copy of No-objection Certificate from property owner

Scanned copy of Sale Deed/Property Deed in English (in case of owned property)

Procedure for Conversion of LLP into Company

Obtain Name Approval

Obtain name approval from the Registrar of Companies (ROC) by submitting Reserve Unquie Name (RUN) form.

Securing DSC and DIN

After obtaining name approval, apply for Digital Signature Certificate (DSC) and Director Identification Number (DIN) for the member of the LLP who will be the directors of the Private Limited Company after conversion.

Filing of Form URC-1

E-form URC-1:File URC-1 within 30 days from name approval with ROC and then Publish advertisement in Form URC-2 in an English newspaper and local newspaper (seeking objection if any within 21 days from publication) circulating in district where LLP is situated.

Particulars of members/partners along with the details of shares held by them

Declaration of two or more directors verifying the particulars of all members/ partners

Affidavit from all the members/partners for dissolution of the entity

Copy of certificate of registration of the entity

Copy of the instrument constituting or regulating the entity

Copy of Newspaper advertisement

Certificate from a CA/CS/CWA certifying the compliance with all the provisions of Stamp Act, to the extent applicable

Memorandum of Association & Articles of Association

Formulate Memorandum of Association (MOA) and Articles of Association (AOA) and submit it to the Registrar of Companies. Once you have obtained approval of the company name, the Registrar of Companies issues the form URC-1.

The primary reason of conversion of LLP into Private Limited Company is the growth in business. LLP framework does not fit for venture capitalists or for private equity, also investors are more comfortable in investing in private limited company. For the purpose of FDI also, private limited companies are considered to be as the preferable choice over LLP. Hence, the conversion of LLP to private limited company can be a wise decision and shall be performed by taking all prescribed regulations into consideration.

Filing of Other E-FORMS ON MCA PORTAL

DIR 12

INC-22

AGILE PRO

INC-9( with requisites fees)

After due verification in all aspects made for conversion of LLP to Private limited company, a certificate of incorporation will be issued by ROC

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