One Person Company to Limited Liability Partnership

An OPC can be converted into LLP but not voluntarily, only after the expiry of two years from the date of incorporation.

Can an OPC (One Person Company) convert into LLP (Limited Liability Partnership)?

An OPC cannot be converted voluntarily into any form of a business entity within the two years of incorporation. So, the conversion of one person Company into LLP is also possible after two years from the date of incorporation. For the conversion, certain e-forms should be filed with the Registrar to register under the Limited Liability Partnership Act, 2008. All you need is one more person because LLP formation required minimum two people.

Requirements for conversion of OPC to LLP

  • Every member, as well as creditors of the company, must be agreed for the conversion.
  • The latest copy of ITR (Income Tax Return) has to be filed with ROC.
  • No prosecution has been initiated under the Companies Act, 2013.
  • All members agree to become the partners of an LLP.

LLPs benefit over One Person Company

  • No bar on the number of owners in the business
  • Less compliance burden as compared to other entities
  • No requirement for compulsory audit
  • Save the burden of Dividend Distribution Tax
  • Double advantage of both a company and a partnership
  • The internal structure of an LLP easier to manage

Company’s benefit over LLP

  • One's great potential allowing to create a company individually
  • Minimal maintenance is required
  • Easy to set up
  • Separate entity ensure the protection of limited liability
  • Full control over the business by one person

Procedure for the conversion

  • Obtain DPIN (Designated Partner Identification Number) in Form DIR-3
  • Call a board meeting of the directors and pass a resolution for such conversion
  • File form LLP-1 for the name of the company which will be changed into the name of the LLP
  • Draft LLP agreement
  • File incorporation documents in form LLP-2
  • File form-18 for application of conversion
  • File form-3 which contains the details of the LLP agreement
  • Obtain the certificate of incorporation
  • File form-14 within 15 days from the date of receiving the incorporation certificate.

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