Conversion of LLP Into Pvt Ltd Company

Overview

The choice of most of the entrepreneurs is opting for LLP registration as small businesses and now wish to convert into a private limited company for growth in business or for infusing equity capital .LLP having plans for expanding the business by raising equity capital then at this point of time, requirement to convert to a private limited company.

LLP is preferred when the capital contribution is less than Rs.25 lacs and annual turnover is less than Rs. 40 lacs and in this case, LLP is not required to audit their statements which reduces cost of compliance. But If LLP crosses the aforesaid prescribed limited, then it is better to opt for Private Limited Company as the compliance requirement of LLP and private limited company becomes almost same.

Procedure for Conversion of LLP Into Company

• HOLD BOARD MEETING -
  • A Meeting of all the Partners and designated partners must be held to take consent of majority of Partners for conversion of LLP into Company.
  • Authorization of partners to initiate the conversion process
• CHECK NAME AVAILABLITY - LLP have to apply for Availability of the Name in RUN in case LLP want the same name then availability can be checked through adding Private Limited or Limited in the last of the name.
• FILING OF DOCUMENTS WITH ROC -
  • On obtaining the approval of Name, file the Form URC-1 along with required documents with the registrar of Companies within 60 days from the date of name approval.
  • Company required to file e-form Spice+ INC-32, 33, 34, 35 along with URC-1.

For conversion of LLP into Private limited company, following documents is required

• An affidavit by first proposed directors, that he is not disqualified to be a director and all the information provided with the Registrar is correct and true to the best of his knowledge and belief.
• Details of proposed first directors of the company with their names, DIN, residential addresses, passport number along with an expiry date and their interests in other firms or bodies corporate along with consent to act as director of the company.
• A list containing the names and addresses of the Partners Limited Liability Partnership Firm.
• A copy of LLP Agreement and certificate of registration duly verified by two designated partners of LLP.
• A list showing the names, addresses, and occupations of all persons named therein as members with details of shares held by them
• a copy of latest income tax return filed by the Limited Liability Partnership
• Written consent or NOC from all the secured creditors of the applicant.
• Duly certified accounts statement by the auditor, which should not be less than six days from the date of application and
• The copy of the newspaper advertisement is required.
• A statement specifying the following details:-
  i. The nominal share capital of the company and the number of shares in which it is divided.
  ii. The number of shares taken and the amount paid on each share.
  iii. The name of the company, with the addition of the word “Private Limited" as the last word thereof.

Minimum Requirement for Conversion

• Consent of all partners for conversion.
• There should be atleast 7 members in case of conversion into public company or 2 members in case of conversion into private company.
• NOC of registrar with which LLP is registered.
• Advertisement of conversion in local and national newspapers.