Yes a Limited Liability Partnership can be converted in to Private Limited Company, and many businesses started as Limited Liability Partnership gets themselves converted into Private Limited Company. This conversion is done by virtue of section 366 of The Companies Act 2013.
The advantage of conversion can be for raising more funds from market or for more growth in business or this conversion could be to avail the advantage of Lower tax rates in comparison to Limited Liability Partnership. However this conversion needs some requirements to be fulfilled.
Alonika.in is the right option to begin the journey. Get LLP converted in to Private Limited Company by Professionals like Chartered Accountants and Company Secretaries. Just contact us and stay focused towards the dreams of success.
Documents required for conversion:
|S. No.||Document Required|
|1.||PAN card &Aadhar card of all Partners|
|2.||Passport size photograph of all Partners|
|3.||LLP agreement and Incorporation Certificate|
|4.||Last Filed ITR of LLP|
|5.||Current Financial statement|
|6.||NOC from all Creditors|
|7.||Approval of all the partners for conversion|
|8.||News paper cutting for Advertisement of conversion|
|9.||DIN and DSC of all Partners|
|10.||Address proof of place of business (Rent deed / Electricity Bill or Registry deed / NOC)|
Advantages of Conversion of LLP to Private Limited Company
EASY FUND RAISING: In compare to LLP fund raising is easier for Private Limited Companies and always preferred by investors.
ESOP options: Only a company can offer ESOP to employees, helps in building confidence of employees in the management and allow them to feel like more than just employee thus results in best outputs.
Lower Tax Rate: Income Tax Rate is lower for a company in compare to a LLP.
Process of Conversion
- Holding the meeting of all partners for the consent of conversion of LLP into Private Limited Company.
- Filing RUN application for availability of name. Business can be run in the same name subject to availability and in place of LLP, Limited or Private Limited will be used as suffix.
- Company required filing e-form URC- 1 along with all the below mentioned documents:
- A list showing the names, addresses, and occupations of all persons named therein as members with details of shares held by them
- A list showing the particulars of persons proposed as the first directors of the company
- An affidavit from each of the persons proposed as the first directors, that he is not disqualified to be a director under sub-section (1) of section 164 and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief
- A list containing the names and addresses of the partners of the Limited Liability Partnership
- Copy of LLP Agreement
- A statement of assets and liabilities of the Limited Liability Partnership duly certified by a chartered accountant in practice which is made as on a date not earlier than thirty days of the filing of form no.URC-1
- A copy of latest income tax return of the Limited Liability Partnership
- An undertaking that the proposed directors shall comply with the requirements of Indian Stamp Act, 1899 (2 of “1899)
- Written consent or No Objection Certificate from all the secured creditors of the applicant
- Written consent from the majority of Partners
- A statement specifying the following particulars:—
- the nominal share capital of the company and the number of shares into which it is divided;
- the number of shares taken and the amount paid on each share;
- the name of the company, with the addition of the word “Limited” or “Private Limited” as the case may require, as the last word or words thereof;
- Filing of MOA and AOA with Registrar of Companies.
Frequently Asked Questions
What are the steps required for incorporating a Private Limited Company in India?
- Getting DSC(Digital Signature Certificate) and DIN(Director Identification Number)
- Approving the name of the Company
- registering the Company address
- Drafting MOA(Memorandum Of Association) & AOA(Article of Association)
- Filing of e-form(INC-7) with the ROC(Registrar Of Company)
- payment of ROC fees & getting a stamp on the documents.
- verification by the ROC
- Finally the certificate of incorporation to be given by ROC
Can LLP (Limited Liability Partnership) be converted to Private Limited Company?
Why Private Limited Company is the choice for Start-ups?
- Legal Compliances
- Number of people required are low
- Funding requirements can be fulfilled with the help of shareholders and financial bodies.
- Limited liability of the members
- Growth of Business can be done by converting a Private Limited to a Public Limited, but an LLP cannot be converted to a Private Limited hence it restricts the growth.
- Even though Private Limited Company is expensive but to execute the Big idea into a successful long term business Private Limited Company is the best choice for start-ups.
How long is the company valid for?
Is an office required to open a company?
- Rent agreement along with latest rent receipt (in case the premises are rented)
- House tax receipts (in case premises are owned)
- Electricity bill
- NOC from the Owner (Format will be shared once your company name approved)
What are the basic requirements for naming a Company?
What is PAN?
What is TAN?
What is DSC?
What is DIN?
What is a Stamp Duty?
Do I need a Chartered Accountant to register my company
Can a government servant, start his/her own company?
What is a Share Certificate?
When to appoint a CS in company?
Difference between Private Limited and Public Limited Company?
|Features||Public Limited Company||Private Limited Company|
|Invitation to public||Yes||No|
|Issue of prospectus||Yes||No|
|Quorum at AGM||5 members||2 members|
|Term used at the end of name||Limited||Private limited|
|Managerial remuneration||Cannot exceed more than 11% of net profits||No restriction as such|
|Statutory meeting (mandatory)||Yes||No|