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Limited Liability Partnership is a body corporate that is governed by the LLP Act, 2008 and is a form of partnership wherein partners have limited liability according to their contribution. It is a hybrid of company and partnership. It is better in some aspects as compared to normal partnership firms in India but lacks a few benefits as compared to Private Limited Companies.

Section 366 of the Companies Act, 2013 allows the conversion of LLP to Private Limited Company by LLP registration under Chapter XXI of the Companies Act, 2013.

According to Section 366, any partnership firm, limited liability partnership, cooperative society, society or any other business entity formed under any other law for the time being in force, consisting of 2 or more members, may at any time register under this Act as an unlimited company, or as a company limited by shares, or as a company limited by guarantee, in a prescribed manner.

 A company with less than 7 members shall register as a Private Limited Company.

Coverting LLP to Private Limited Company:

1.Hold a meeting of the partners and decide by the majority, whether LLP should be registered under Section 366 of the Companies Act, 2013.

2.Also, in the meeting, authorize a few partners to conduct all the procedures required.

3.Apply for the name. The same name that was for LLP can be used for private limited company registration (depending on the availability of the name). Company’s name should include the words “Private Limited”.

4.Publish in the newspaper.

5.File Form URC-1 along with specified documents.

Attachments are mandatorily required in the Form URC-1:

  1. Particulars of the partners (names, addresses, occupations) along with the details of shares held by them, showing separately shares allotted for consideration in cash and consideration other than cash along-with the source of consideration;
  2. Declaration of two or more directors verifying the particulars of all partners- Particulars of persons proposed as the first directors of the company, their names, DIN, passport number (if any) with an expiry date, residential addresses and their interests in other firms or bodies corporate along with their consent to act as directors of the company;

iii. An affidavit from all the partners for dissolution of the LLP;

  1. Copy of the LLP agreement;
  2. Copy of Newspaper advertisement;
  3. Certificate from a CA/CS/CWA certifying the compliance with all the provisions of the Stamp Act, to the extent applicable;

 vii. Undertaking by the proposed directors for compliance with requirements of the Indian Stamp Act, 1899;

 viii. A copy of the latest Income Tax Return of the Limited Liability Partnership;

  1. Copy of certificate of incorporation of LLP;
  2. Written consent, from the majority of members whether present in person or by proxy at a general meeting, agreeing for such registration;
  3. No objection certificate from the concerned Registrar of Firms or Registrar of Companies (LLP);

      xii. Written consent or No Objection Certificate from all the secured creditors of the LLP;

xiii. Statement of accounts of the LLP prepared not later than 15 days preceding the date of application duly certified by the auditor, if applicable.

Can also attach any other documents, if you consider them necessary or officials ask for those.

  1. After receiving sanction for Form URC-1 from the Registrar of Companies, formulate MOA (Memorandum of Association) and AOA (Articles of Association) and file with ROC.
  2. SRN (Service Request No.) of RUN (Reserve Unique Name). Click on Pre-fill. The name of the proposed company shall be pre-filled in the form.
  3. Type of company- On entering SRN, it shall be pre-filled.

iii. Type of existing entity.

  1. LLP Identification Number (LLPIN)- On entering SRN, it shall be pre-filled.
  2. Name, address and E-mail id of the existing LLP- On entering LLPIN, these details shall be pre-filled.
  3. Select the category of the proposed company – Limited by shares (for conversion to Private limited company).

vii. Date of the instrument constituting the existing entity and description of the instrument (LLP agreement in this case).

viii. Date of general meeting passing the resolution assenting to registration

  1. Particulars of passing special resolution and place of the general meeting.
  2. The total amount of property.
  3. Declaration by a Director regarding truthfulness, completeness, and correctness of the information provided in the Form.
  4. After receiving sanction for Form URC-1 from the Registrar of Companies, formulate MOA (Memorandum of Association) and AOA (Articles of Association) and file with ROC.

Note:

  • given in the form URC-1 is to be certified by any of the following through DSC-
  • A chartered accountant in whole-time practice, OR
  • Cost Accountant in whole-time practice, OR
  • Company Secretary in whole-time practice.

To be noted by Professional experts involved in the conversion of LLP to Private Limited Company: 

  1.  Obtain an engagement letter for certification.
  2.  F.Y original records and attachments.
  3.  Keep a check on business functioning at the principal place of business, through a personal visit to ensure sure that the attachments are complete and legible.

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