Conversion
of Private Limited Company into LLP
With
the advantages of LLP, corporate are opting to restructure their business by
converting them into LLP. Coming to the advantages of LLP;
·
Easy to Form
·
Unlimited Partners
·
No minimum Contribution i.e. Capital required
·
Limited Liability
·
Perpetual Succession
·
Flexible to Manage
·
Easy Transferable Ownership
·
Separate Property
·
LLPs are Less Taxed
·
Raising Money is easy
·
Capacity to sue
·
No Mandatory Audit Requirement
·
Partners are not agent of other Partners
Existing
private company or existing unlisted public company can be converted into LLP
by complying with the Provisions of clause 58 and Schedule III and IV of the
LLP Act.
Basic
Requirements FOR CONVERSION OF COMPANY INTO LLP
ü
In case of conversion
of Private Limited Company into LLP, all the shareholders of the
Company shall be the partners in the LLP.
ü
Also there will be NO
SECURITY INTEREST subsisting or in force at the time of application in
the assets of the Company.
ü
Every Designated Partner is required
to obtain a DIN and Digital Signature to file the forms online.
ü
Up to date Income-tax returns is required
to be filed under the Income-tax Act, 1961.
ü
Need to check whether any
prosecution initiated against or show cause notice received by the company for
alleged offences under the Companies Act, 1956.
ü
Need to check whether any proceeding
by or against the company is pending in any Court or Tribunal or any other
Authority.
ü
Need to check whether any
conviction, ruling, order, judgment of any Court, Tribunal or other authority
in favour of or against the company is subsisting.
ü
Need to check whether any clearance,
approval or permission for conversion of the company into limited liability
partnership is required from anybody/ authority. etc
PROCESS
OF CONVERSION OF COMPANY INTO LLP
A
Private Company may convert into LLP in accordance with the procedure
prescribed in the Third Schedule. Process as given below:
1. OBTAIN DIN & DSC for the
existing Shareholders
If the Existing Shareholder has already obtained DIN
earlier, then, there is no need to apply again.
2.
BOARD MEETING:
ü
Call meeting of board of Director.
ü
Pass Resolution for Conversion of
Company into LLP.
ü
Pass Resolution to authorize any
director to Apply for Name of LLP.
3.
APPLICATION FOR NAME AVAIBILITY:
File
e-form 1 with ROC.
Attachments: Board Resolution Board resolution passed by the Company
approving the conversion into LLP shall be attached with the
aforesaid form
4. Obtain name Approval Certificate
from ROC.
5. FILING OF INCORPORATION
DOCUMENTS:
File E-Form-
2 with ROC along with following ATTACHMENTS:
ü
Proof of Address of Registered
office of LLP.
ü
Subscription sheet signed by the
promoters.
ü
Detail of LLP(s) and/ or company(s) in which partner/ designated partner is a director/
partner
7. FILLING OF APPLICATION FOR
CONVERSION:
File
E-FORM- 18 with ROC along with following ATTACHMENTS:
ü
Statement of shareholders.
ü
Incorporation Documents &
Subscribers Statements in Form 2 filed electronically.
ü
Statement of Assets and
Liabilities of the company duly certified as true and correct by the
auditor.
ü
List of all the Secured creditors
along with their consent to the conversion.
ü
Approval of the governing council
(In case of professional private limited companies)
ü
NOC from Income Tax authorities and
Copy of acknowledgement of latest income tax return.
ü
Approval from any other
body/authority as may be required.
ü
Particulars of pending proceedings
from any court/Tribunal etc.
6. DRAFTING OF LIMITED
LIABILITY PARTNERSHIP AGREEMENT:
Contents
of Agreement are:
ü
Name of LLP
ü
Name of Partners & Designated
Partners
ü
Form of contribution
ü
Profit Sharing ratio
ü
Rights & Duties of Partners
ü
Proposed Business
ü
Rules for governing the LLP
ü
It is not necessary to have the LLP
Agreement signed at the time of incorporation, as the details of the same needs
to field in eform 3 within 30 days of incorporation but in order to avoid any
dispute between the partners as to the terms & conditions of the agreement
after the conversion into LLP.
7. FILING OF E-FORM-3:
This
form provides information in respect to the LLP Agreement entered into between
the partners.
ATTACHMENT:
LLP Agreement
8. CERTIFICATE OF INCORPORATION AS
LLP FORM ROC.
After
all formalities and filings been complied with by the applicants and approved
by the Ministry, REGISTRAR OF LLP TO ISSUE A CERTIFICATE OF REGISTRATION in
form no. 19 as to conversion of the LLP. The Certificate of Registration issued
shall be the conclusive evidence of conversion of the LLP.
9. FILLING OF E-FORM-14: (INTIMATION
TO ROC)
After
Receiving Incorporation Certificate Limited liability partnership to file
within 15 (fifteen) days of the date of registration, information to the
concerned Registrar of Companies with which it was registered under the
provisions of the Companies Act, 2013 (1 of 2013) about the conversion and of
the particulars of the limited liability partnership in eForm
14 within 15 days of conversion into LLP.
ATTACHMENTS
OF E-FORM 14
·
Copy of Certificate of Incorporation
of LLP formed.
·
Copy of incorporation document
submitted in Form 2
STEPS
OF CONVERSION:
|
S. NO.
|
PARTICULAR
|
REQUIREMENT
|
|
1.
|
Apply
for Din No.
|
e-form
DIR-3
|
|
2.
|
Call
BM- to change name – ending with word LLP
|
|
|
3.
|
File
Form for Name approval with work LLP
|
E-form
1
|
|
4.
|
ROC
issue name approval certificate
|
|
|
5.
|
Incorporation
documents with registrar
|
File
e-form -2
|
|
6.
|
Application
of Conversion
|
e-form
– 18
|
|
7.
|
LLP
Agreement- within 30 days of approval of above forms
|
e-form-
3
|
|
8.
|
If
incorporation certificate is issued by department; then
|
|
|
9.
|
Intimation
of Conversion to Registrar
|
e-form-14
|
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