The LLP is a separate legal entity, liable to the full extent of its profits but the liability of the partners is limited to some conditions contribution in the LLP.

Re-requisites:

• Every member of the company should agree with the decision of conversion.
• Only the members should be partners of an LLP and no one else.
• The latest copy of the Income-tax return should be filed with ROC.
• Not only the members but also the creditors of the company must agree with the conversion.
• No unsatisfied charges should be there against the company.
• At least a single balance sheet and annual return should have been filed by the company after the incorporation.
• The company must have share capital.

Eligibility for conversion of private limited company to LLP

Under the following circumstances, a private limited company can be converted into an LLP

• As the company has no security interest in its profit at the time of application.
• The partners of the LLP compulsory should be the shareholders of the company.

Effect Of Conversion Of Private Limited To Llp

• A private limited company is compulsorily dissolved after conversion.
• Name registered for the private limited company will be removed after conversion
• Conversion will not affect any liabilities, obligations, applications, agreements, contracts, and continued employment.
• The company has to follow all the authorities concerned with the conversion and it is necessary to change all the registrations and licenses after conversion.

• On the conversion of a private limited company into LLP, all profit and loss are converted into LLP.
• There will be no stamp duty implied on such transfers.
• No limit to the number of partners is in LLP which is not so in the case of private limited companies.
• There is not a compulsion on holding several meetings and maintaining records.

• Incorporation document for Form 2.
• Form 3- is mandatory for application and declaration for LLP.
• A clearance certificate from tax authorities is mandatory.
• Statement of profit and loss from the company.
• List of creditors with their consent.
• Approval from any foreign.
• Authorization to make a declaration.
• Optional attachments, if there are any.
• Procedure for Conversion of Company into LLP
• Obtain Director Identification Number.

• Step 1

  Obtain DIN from the partners who don’t have DIN already, Board Meeting.

• Step 2

  The board meeting will be compulsorily processed to note the proposal of conversion. The board meeting confirmation is to be passed for the Conversion of private limited Companies into LLP.

• Step 3

  private limited Company should apply for reservation of name.

  • Attach Documents

• Step 4

  File e-Form in it fill it ROC.

  • Filing of Application for Conversion into LLP

• Step 5

  : Form 18 is referred to as the form for the conversion of a company into an LLP as it needs to be filed.Certificate of Incorporation as LLP from ROC

• Step 6

  After going through all the terms and conditions by the firm and approved by the government then ROC to issues the conversion of LLP.

  • Filing of E-Form-3
  • The filling of e- Form will provide details about the LLP Agreement entered between the members and it should be within the time limit of 30 days from the date of conversion.
  • After receiving the incorporation certificate of LLP e form 3 should be filed in the time limit 15 days after the date of conversion.

The Limited liability partnership must be registrar on the conversion of the company into LLP within 15 days. The intimation should be in Form 14. Registrar after completing the requisite LLP formalities of conversion, the company will get a certificate of registration. If the Registrar denies the conversion, the private limited company can file an appeal.

An LLP has referred to a most efficient form of organization over a private limited company from a compliance and taxation point of view. It is more suitable for small entrepreneurs and professionals particularly also it is beneficial. Conversion for the private limited company can be made through an LLP while retaining the advantages of Limited Liability.