Conversion of LLP to Private Limited Company is a pivotal choice of a company aiming to raise equity funds, claim the benefit of tax breaks & deductions and enhance credibility. The Ministry of Corporate Affairs (MCA) facilitates the conversion under section 366 of the Companies Act,2013.
Converting a Limited Liability Partnership (LLP) into a company involves several steps: -
Passing of Board resolution
Obtain DIN & DSC of all Directors
Name Approval
Publish Notice (URC - 2)
File necessary forms (Spice+ Part B, MOA, AOA, INC-9, INC-35, URC-1)
Approval and Conversion
Post conversion compliance
Now let's discuss the steps to Convert a Limited Liability Partnership (LLP) into a company
First, we have to check whether every director has DSC or not if yes then we have to collect the same if not then we have to make a Digital Signature first, because every work is done electronically so every director is required to sign every form electronically through DSC. Documents are required for Individual DSC to make an Aadhar card, PAN card, bank statement, and photograph of the director. For DSC you can refer to our DSC service tab for more information.
Secondly, we have to know whether the Director has an existing DIN or not, if yes then we have to collect the required information of the Director that in which company he has an interest and how much he holds shares in the company.
Then after all that we are going to reserve the name of the company by filing the form Spice+ Part A and it took 3 days to get the name reserved and after that, we have 21 days to incorporate a company.
Meanwhile, in between the 3 days of name approval, we will make other necessary documents like DIR-2, NOC for the registered office, etc.
After the name approval, we will file details in Spice+ Part B form which includes details of shares, subscribers, directors, registered office, PAN TAN codes, etc and submit the form after signing of all the forms by every director and shareholders.
After submitting the form, we have to prepare INC 33 i.e., Memorandum of Association, INC 34 Article of Association, INC 9 details of Subscribers and Directors, INC 35 Agile PROS.
And then we have to submit all the forms and wait for the approval by the Registrar of Companies.
After getting we have to do post-incorporation compliances likeADT-1, INC-22, INC-20A, GST registration, etc.
Firstly, conduct a meting to take approval of partners agreeing to the conversion of LLP to Private Company by passing a special resolution. The resolution shall be filed with ROC within 30 days of passing the resolution.
Submit the e-Form INC-1 to reserve the proposed name of company and take approval of ROC which is valid for a period of 60 days. Within this period incorporation process must be completed.
Once the approval of name is obtained, the LLP must file the Form URC-1 with the RoC. This form contains the details of the partners, the financial position of the LLP, the names of the proposed directors, and a declaration of compliance with relevant laws & regulations. Prepare Memorandum of Association (MOA) & Articles of Association (AOA) outlining the objectives of the company and file it to the ROC. Obtain the No Objection Certificate (NOC) from all the secured creditors confirming that they have no objection regarding conversion and submit the same to the ROC.
Following Forms are required to be filed to the ROC for the formation of company:
INC-32
INC-33
INC-34
If ROC is satisfied with the above shared documents and everything seems correct then COI (Certificate of Incorporation) will be issued. This certificate will act as a proof of conversion of LLP to Company.
Time Taken in this work
We will do this work in 4-5 days if all the documents are provided properly and ROC will take approx. 30 days to approve the same.
Why Choose HireYourCA?
Why Choose HireYourCA?
There are several reasons why HireYourCA stands out as your go-to partner for business registrations and compliance:
Experienced and Qualified Team: Our CAs possess extensive knowledge and expertise.
Seamless Service: We handle the entire process, keeping you informed at every step.
Cost-Effective Solutions: Competitive pricing ensures value for your money.
Client-Centric Approach: We prioritize your needs and offer personalized guidance.
Technology-Driven Platform: Our user-friendly online platform enables easy tracking and access to documents.
Transparency and Trust: We maintain complete transparency and adhere to the highest ethical standards.
Eligibility
Eligibility For Converting LLP To Private Limited
Approval from all the partners by passing a resolution with their consent.
The LLP must file all the annual returns and comply with all the regulations till date.
Consent from all the creditors prior to the conversion.
Minimum Shareholders and Directors: The proposed Private Limited Company must have at least two shareholders and two directors. The directors can be the same individuals who are partners in the LLP.
DIN and DSC: The partners of the LLP must have a Director Identification Number (DIN) and a Digital Signature Certificate (DSC) for the conversion to a Private Limited Company.
Documents Required for CONVERSION OF LLP TO COMPANY
To convert an LLP to a Private Limited Company, you'll need the following documents:
Identity Proof required for all designated partners.
Address Proof required for all designated partners.
Passport Size Photographs For all designated partners.
Copy of Latest Financial Returns of LLP.
LLP Agreement A copy of the LLP agreement.
Certificate of Registration of the LLP.
Board Resolution by the Directors for the changing from the LLP to Company.
Director Identification Number (DIN) required for all designated partners.
Digital Signature Certificate (DSC) is necessary for all designated partners.
Declaration by Directors for verifying the particulars of all partners.
Affidavit from Partners on notarized stamp paper for dissolution of the LLP.
Advertisement in Newspapers: Form URC-2 to be published in a local and an English newspaper and then it has to be attached in form URC-1.
Benefits Of Getting Conversion Of Llp To Company
Limited liability: - Private limited company enjoys the benefit of limited liability which means shareholder are liable only extent to their capital contribution.
Distinct legal identity: - A private limited company posses and independent legal entity distinct from its directors and shareholders. It has the capacity to sell, buy anything on the name of company
Perpetual Legal Entity: - It has the feature of perpetual legal entity which means Director and shareholder may come and go but the company is going to run forever.
Tax benefits: - A private limited company enjoys the benefit of tax and has lower tax rate as compare to other entities.
Ease of funding: - Raising capital by issuing share to investors, venture capitalist, or angel investor is easier and also attract external investment.
