How to Convert a Private Limited Company to LLP?
Companies Act, 2013 requires companies to comply with way too many procedures. This not only takes time but also becomes costly. Thus many small private limited companies have opted to convert to LLPs. LLP or Limited Liability Partnership is a hybrid entity that has features of a company as well as of a partnership firm. There is an interesting read on our blog about the differences between a Private Limited Company, LLP, OPC and Partnership. The steps for conversion of private limited company to LLP are:
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Obtain Director Identification Number (DIN) for all those designated partners who do not have it.
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Hold a Board meeting and pass a special resolution for conversion to LLP. Also pass a resolution appointing a director to apply for a name.
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File Form No. LLP-1 electronically with Registrar of Companies (ROC) to check availability of name. Attach a copy of Board resolution with the application.
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After obtaining ROC approval draft limited liability partnership agreement. The contents of the agreement should be name of LLP, name and designation of partners, form of contribution, financial structure, profit sharing ratio, proposed business, rights and duties of partners, governance structure and rules of governance.
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File the duly signed agreement with e-Form No. 3 within 30 days of incorporation. Although the agreement doesn't need to be signed at the time of incorporation but to avoid defaults and confusion all partners should sit together, formulate the agreement and sign it.
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File incorporation documents with ROC in e-Form No. 2 along with address proof of Registered Office of LLP, subscription documents duly signed by promoters, appointed partners along with their consent and personal details, details of companies and firms the partners are directors or partners.
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File an application of conversion with ROC in e-Form No. 18. Along with it attach statement of shareholders, LLP incorporation documents, statement of assets and liabilities of the company being converted, NOC from IT department and consent from secured creditors.
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After receiving COI intimate the ROC under which the company was registered within 15 days of conversion in e-Form No. 14 along with the COI of LLP formed and copy of incorporation documents.
If you are having trouble in converting your Private Limited Company to LLP, you can contact us.
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