Conversion of Private Company into LLP

Procedure for Conversion of Private Limited Company into LLP

Governing Law:

Limited Liability Partnership (LLP) is governed by The Limited Liability Partnership Act, 2008. A LLP is incorporated in the nature of Body Corporate formed and registered under LLP Act, 2008 and is a legal entity separate from its Partners.

Section 56 deals with conversion of Private Limited Company into Limited Liability Partnership (LLP).

Schedule III: A Private Company can convert in to an LLP by following procedure prescribed in schedule III.

Convert in relation to a private company converting in to a limited liability partnership, means transfer of the property, assets interest, rights, privileges, liabilities, obligations and the undertaking of the private company to the limited liability partnership according to this schedule.

STEPS OF CONVERSION OF COMPANY IN TO LLP:

  Ø  Step 1. OBTAIN DIN:

 Earlier there was Concept of DPIN, which has been abolished therefore. Now obtain DIN for those designated partners who don’t posses DIN already.

  Ø  Step 2. BOARD MEETING:

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.

  Ø  STEP 3. APPLICATION FOR NAME AVAIBILITY:

File e-form INC-1 with ROC.

Attachments: Board Resolution Board resolution passed by the Company approving the conversion into LLP shall be attached with the aforesaid form.

  Ø  STEP 4. Obtain name Approval Certificate from ROC

  Ø  STEP 5. 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

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 E-form 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.

  Ø  STEP 6. FILLING 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  (Notice of Consent & Appointment of Designated Partners with their personal details)

ü  Detail of LLP(s) and/ or company(s) in which partner/ designated partner is a director/ partner

  Ø  STEP 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.

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.

  Ø  STEP 8. FILLING OF E-FORM-3:

This form provides information in respect to the LLP Agreement entered into between the partners.

ATTACHMENT: LLP Agreement

  Ø  STEP 9. CERTIFICATE OF INCORPORATION AS LLP FORM ROC.

Thanks and Regards

CS Chetan Bhadouria  

(ACS, B.Com)

Mob: 9899399209

Email id: cschetanbhadouria@gmail.com

Blog: http://cschetanbhadouria.blogspot.in/