Private Limited Company can be converted into LLP, as there are provisions contained in Companies Act 2013. A Private Limited Company needs to file Form LLP 1, Form LLP 18, Form LLP 14 to convert itself into a Limited Liability Partnership.
Can a Private Limited Company be converted into a Limited Liability Partnership?
As per the Rules and Provisions contained under Companies Act 2013 and Companies Incorporation Rules 2014, A Private Limited Company has the privilege to be converted into Limited Liability Partnership. An LLP needs at least 2 Designated Partners and an LLP agreement.
Why would I Convert Private Limited Company into Limited Liability Partnership?
Limited Liability Partnership is more suitable for those who does not want much government interaction in their business. As LLP has lesser compliance work than a private limited company, No Compulsory Audit clause, etc. LLP just need to maintain some documents like Statement of Solvency, Books of Accounts, etc.
An LLP is also a unique form of business which has the benefits of both Partnership and Limited Company. Being a Partnership Form, LLP enjoys the benefit of Limited Liability which is a feature of a Limited Company.
Conversion Procedure of Private Limited Company to Limited Liability Partnership
Step 1.Director's duties are similar to the duties of Designated Partner. In the case of conversion, the DIN of the director will work as a DPIN of the Designated Partner.
Step 2.File Form LLP-1, This form is for the application of Name Reservation. In Form LLP-1 there is an additional attachment required, in which applicant needs to make a request to ROC to provide the same name.
Step 3.After getting the approval of Form LLP 1, Form LLP-18 has to be filed with following Attachments:-
Shareholders Statement(should be in Tabular Form)
Statements and document which are filed in LLP Form-2 at the time of Incorporation
Statement of Assets and Liability which is duly attested by a Chartered Accountant
Consent of Creditors for the conversion(Should be in tabular form)
Approval of the Governing Council
NOC is required from Income Tax authorities
If required, Approval from any body corporate or authority
Particulars of legal obligation which is imposed by Law or Particulars of pending cases in any court/Tribunal etc.
If applied earlier for conversion then Rejection letter from Registrar
Other optional attachment option is given.
Step 4.After approval of Form LLP-18, Registrar will issue a certificate of Incorporation in Form LLP-19 which contains the LLPIN of the Limited Liability Partnership
Step 5.Form LLP-14 has to be filed within 15 days after incorporation in which following documents are required, which intimidate the Registrar that proper communication for conversion is made to the applicants.
Certificate of Incorporation
Copy of Incorporation documents submitted in Form LLP-2