Conversion of LLP into a Private Limited Company - Overview
Businesses convert from LLP into a Private Limited Company to enjoy the remarkable benefits and to attract shareholders.
Entrepreneurs in India generally starts their business journey with a Limited Liability Partnership (LLP) after experiencing good growth in business, they would be keen to convert their LLP firm into a private limited company for more development and prosperity in their business. Provision mentioned in the Section 366 of the Companies Act, 2013 and Company (Authorised to Register) Rules, 2014, says that an LLP can be converted into a Private limited Company.
For conversion it is necessary for a LLP to have seven partners and approval from all partners is must needed. An advertisement is published in both local and national newspaper, No Objection Certificate (NOC) is obtained from the ROC where LLP is registered and then all the incorporation process begins.
Benefits of Conversion of LLP into Private Limited Company
Limited Liability
Separate Legal Existence
Easy Fund Raising
Employee Stock Ownership Plan
Preservation of Brand Value
Carry forward of unabsorbed losses and depreciation
Documents Required For Registration
- Name, Address and Shares owned by the members along with the list of the members.
- Disclose the details such as Name, Address, DIN, passport number along with an expiry date of all the directors of the Private Limited Company
- file all mandatory documents to submit with the Registrar of Companies
- Copy of Limited Liability Partnership agreement with a list attached mentioning the name and address of the partners of LLP and a certified copy of registration which is duly verified by at least two designated partners of LPP is required.
- NOC from all the investors or creditors
- Duly certified accounts statement of the company 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.
- details of the nominal share capital of the firm and the number of shares separated the number of shares taken and the amount remitted for each share and the name of the firm with the word private limited to be provided.
Process To Register
- name approval from the ROC (Registrar of Companies)
- Obtaining DSC and DIN for all the seven directors of the company
- Filing of Form URC-1
- Draft formal Memorandum of Association (MOA) and Articles of Association (AOA) and submit it to the Registrar of Companies.
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