Conversions

Private Limited Company to LLP

Conversion of Company to LLP, at an all-inclusive price, including Government Fees and applicable Stamp Duty*

Complete By* : 12 Apr, 2024

Pricing Summary

Traditional CA/CS Price : ₹ 35,000 /-

Other Online Price : ₹ 28,000 /-

Our Base Price : ₹16,796 /-

Govt. fees & taxes : ₹6,204 /-

You Pay: 23,000/- all inclusive

Government Fee included in above

You Save : ₹5,000/- to- 12,000 /-

What do you get?

15 Mins free Consultation with an EXPERT

LLP Agreement

Facilitate Bank account opening

Conversion of Company to LLP

GST Registration, if required #

# Either existing registrations will be modified and if registration does not exist, then fresh registration will be done

Name Reservation

Fresh ePAN, eTAN #

IPro*– basic secretarial data entry done for no time lag, if Annual Compliance Package purchased.

[*Software for Company Law and related compliances]

Why Should You Choose SeedUp for

SAVINGS

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FASTEST

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ADHERENCE

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HASSLE FREE

we only ask for required documents

Company to an LLP (Limited Liability Partnership)

 

Applicable provisions: 

Section 56 of the LLP Act, 2008  read with Third Schedule in case of conversion of Private Limited Company into LLP;

 

Section 57 of the LLP Act, 2008  read with Fourth Schedule in case of conversion of Unlisted Public Limited Company into LLP;

 

“Convert” means :

“Convert” in relation to a company converting into a Limited Liability Partnership (LLP), means a transfer of the property, assets, interests, rights, privileges, liabilities, obligations and the undertaking of the private company to the LLP in accordance with the applicable Schedule.

 

Certain Companies not eligible for conversion :

A Company not having Share Capital (i.e., limited by guarantee)

A Company registered u/s 8 of the Companies Act, 2013 (earlier u/s 25 of the Companies Act, 1956)

 

Documents Required

Statement of consent of shareholders

Statement of Assets and Liabilities of the company

List of all the secured creditors

Incorporation Documents & Subscribers Statements

Particulars of pending proceedings from any court/Tribunal

* (All documents in Pdf scanned. Image file in jpeg format)

* (All documents to be Self Attested and signed on each page)

Conversions

Private Limited Company to LLP

Another popular form of a business structure is an LLP (Limited Liability Partnership. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnershi

Steps for Incorporation

Collect information and documents

Conduct a Board Meeting

Application for Name availability (RUN)

Draft Limited liability partnership agreement (LLP Agreement)

File E- form FiLLiP (Filing of Incorporation Documents)

File E-form 18 (Application for conversion)

Obtain Certificate of Registration (Form 19)

File E Form 3 ( Information of LLP Agreement)

Certificate of Incorporation as LLP

Filing of E Form 14 (Intimation to ROC)

Important features of

Limited Limited Partnership

The Ministry of Corporate Affairs- a Central government Ministry is primarily concerned with administration of the Companies Act 2013, the Companies Act 1956, the Limited Liability Partnership Act, 2008 & other allied Acts and rules & regulations framed thereunder, mainly for regulating the functioning of the corporate sector in accordance with law.

Separate Legal Entity

The LLP has a distinct identity of a legal juristic person with it own PAN. It is separate from its partners.

Perpetual

A limited liability partnership shall have perpetual succession.

Liability

The word ‘limited’ is used to convey the message to public at large that the liability of the LLP and it Partners, is limited- Any change in the partners of limited liability partnership shall not affect the existence, rights or liabilities of the limited liability partnership. The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP. Further, no partner is liable on account of the independent or un-authorised actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct. Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity

Funding

Owned funds. Debt funds can be managed. For startups, Investors do not like to invest in this type of business entity, as investing at various valuation points is difficult.

Conversion prerequisites

Certain Companies not eligible for conversion :

 

A Company not having Share Capital (i.e., limited by guarantee)

A Company registered u/s 8 of the Companies Act, 2013 (earlier u/s 25 of the Companies Act, 1956)

 

Pre-requisites:

  • All the shareholders of the Company and no one else will be the partners of LLP.
  • Conversion must be consented by all the shareholders of the Company.
  • Minimum Number of Designated Partners : 2
  • All other shareholders will be LLP Partners, if the number of shareholders in the Company are more than two.
  • Consent of all the secured creditors have been obtained.



 

Contd…

 

Contd…

A Cost and Benefit analysis must be done before taking the decision for conversion of a Company into an LLP.

The broad heads are:

 

  • Compliances that are involved in running of the entity
  • Applicability of Capital Gain Tax 
  • Rate of Taxation
  • Applicability of MAT 
  • Allowance of Unabsorbed depreciation and accumulated losses
  • Borrowings and financial requirements of the business
  • Stamp Duty on Transfer of Immovable Assets, If any.
  • Application for GST in name of new entity
  • Cost on transfer of Brand Name, Patent(s) and Trade Mark(s) on conversion, if any.
  • Cost of forming of LLP for the purpose of conversion.

Applicability of Capital Gain Tax 

If the conditions are satisfied then the transfer of capital asset or intangible asset to LLP or any transfer of share or shares held in company by a shareholder on conversion of Company into LLP shall not be regarded as transfer:

 

S. No.

Condition

Particulars

i.

Turnover Limit

The Total sales, turnover or gross receipts in business of the company does not exceed Rupees Sixty Lakhs in any of the three preceding previous years

ii.

All the shareholders of company became partner of the LLP

All the shareholders of the company become partners of the LLP in the same proportion as their shareholding in the company.

iii.

Capital Contribution and Profit-Sharing Ration on Conversion.

The Capital Contribution and Profit-Sharing ratio of the shareholders of company should be in the same proportion as their shareholding in the company as on the date of Conversion.

iv.

No other consideration to partners.

No consideration other than share in profit and capital contribution in the LLP arises to partners.

v.

Profit Sharing Ratio after conversion

The erstwhile shareholders of the company continue to be entitled to receive at-least 50 per cent in aggregate of the profits of the LLP for a period of 5 years from the date of conversion

vi.

Assets and Liabilities

All assets and liabilities of the company become the assets and liabilities of the LLP

vii.

Accumulated Profit (Reserve)

No amount is paid, either directly or indirectly, to any partner out of the accumulated profit of the company for a period of 3 years from the date of conversion

LLP Vs Limited Company

Particulars

LLP

Limited Company

Entity Management

LLP agreement and Designated Partners

Memorandum and Articles of Association of the Company and Board of Directors

Liability

Limited, except in case of Fraud and/or wrongful act

Limited Liability

Annual Forms to be filled

Eform-8 & Eform-11

AOC-4, MGT-7, ADT-1, DPT-3, BEN-2, MSME

Statutory Records

No requirement.

Statutory records as per CompaniesAct,2013 like Members Registers, Investment Register Minute Books, Directors Register etc

Audit of Accounts

Required only if Turnover is more than Rs.40 lakhs or Contribution more than Rs.25 lakhs

Audit is mandatory.

Meetings

As per the LLP Agreement

Minimum 2/4 Board Meetings and one Annual General Meeting

Change in Partners/Directors

Every time a change happens in the Partner, the LLP Agreement has to be updated

Filing of Form DIR-12

Related Party Transactions

No restrictions

Section 188 of the Companies Act, 2013 and disclosures under Accounting Standards

Changes to be made after Conversion: 

 

Under Companies Act, 2013

a. Print the new LLP Agreement with new Certificate of Incorporation.

b. Alter the name plate affixed on the outside of every office or place in which its business is carried on and also include, along with its name, the former name or names so changed during the last two years. (Eg: ABC LLP (formerly ABC Private Limited) or XYZ (OPC) Private Limited (formerly XYZ Private Limited))

c. In case of One Person Company, the words "One Person Company" shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.

d. Alter its Common seal, if any. 

e. Alter it letterhead, business letters, billheads, letter papers and in all its notices and other official publications. 

f. Alter the hundies, promissory notes, bills of exchange and such other documents and also include, along with its name, the former name or names so changed during the last two years. Eg: ABC LLP (formerly ABC Private Limited) or XYZ (OPC) Private Limited (formerly XYZ Private Limited))

g. Arrange new rubber stamps with new name

 

File Necessary Amendment Application with the following Organisations/Agencies:

a. Update Entity DSC

b. Bank(s) where the entity maintains its Account(s)

c. Update PAN/TAN/GST

d. Basic Utility Service Providers (eg: Electricity, Water, Internet, Telephone etc.)

e. Inform all the concerned parties where company has made investment(s), taken loan(s), given guarantee(s)

f. Intimate Insurance companies, 

g. Update agreements etc.

h. Intimate and update where the entity applies for tenders

i. Goods and Services Act

j. Shops & Establishment Act

k. Private Security Agency Act

l. EPFO

m. ESIC

n. MSME, FSSAI, DIPP, EXIM, FEMA registration, if any

o. Trade License, Professional Tax

p. Factories Act and other Labour Laws

q. Industry Specific Laws

 

Documents required

 

  • Statement of consent of shareholders
  • Statement of Assets and Liabilities of the company duly certified as true and correct by the auditor
  • List of all the secured creditors along with their consent (Mandatory in case consent of all the secured creditors for conversion of company into limited liability partnership has been obtained). This should not be older than 30 days from date of filing of this form
  • N/paper advert to be published in English and regional language n/papers-
  • Please note that if consent from all the creditors is recd, then there is no need to publish this advert. If however, 75% creditors give them, then it depends upon the ROC if he wants the Co to publish the advert
  • Approval from any other body/ authority. Mandatory in case applicable approvals from the concerned body/ authority or authorities is required and have been obtained.
  • NOC from Income Tax authorities and Copy of acknowledgement of latest income tax return.
  • Attachments as required for E-Form 2
  • LLP Agreement for EForm 3
  • Incorporation Documents & Subscribers Statements in Form 2 filed electronically.
  • Approval from any other body/authority as may be required.
  • Particulars of pending proceedings from any court/Tribunal etc.

 

 

 Information and details required:

a Whether all the shareholders of the company have given their consent for conversion of the company into the limited liability partnership.

b Whether all the partners of the limited liability partnership comprise all the shareholders of the company and no one else.

c Whether any security interest in the assets of the company is subsisting or in force.

d Whether up to date Income-tax return is filed under the Income-tax Act, 1961.

e Whether any prosecution initiated against or show cause notice received by the company for alleged offences under the Companies Act, 1956.

f Whether any proceeding by or against the company is pending in any Court or Tribunal or any other Authority.

g Whether any earlier application for conversion of the said company into limited liability partnership was refused by the Registrar.

h Whether any conviction, ruling, order, judgment of any Court, Tribunal or other authority in favour of or against the company is subsisting.

i Whether there are any secured creditors

j Whether any clearance, approval or permission for conversion of the company into limited liability partnership is required from any body/ authorit

k Whether upto date documents including latest balance sheet and annual returns under the Companies Act, 1956 have been filed.