Convert Pvt. Ltd. to LLP

Convert Pvt. Ltd. to LLP

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OVERVIEW

Certificate of Registration with the Companies Act, 2013 coming into force in full swing the companies and their directors need to be vigilant at all times. It will not be a caricature to say that it is no more human to err under the Act, 2013 since the repercussions of any act of error, omission, commission can literally have the directors behind bars and give a pinch of few Crores in a blink of an eye. As a much expected effect of the Act, 2013 was the urge for companies to avoid coming under the regulatory burden. Hence there are several companies currently evaluating the prospects of converting themselves into LLPs considering the ease of regulations and ease of doing business. The LLPs structure as is known is a hybrid of a partnership enterprise and a company. It helps the entity remain a body corporate yet is lightly regulated as compared to companies.

The LLP must intimate the registrar on the conversion of the company into LLP within 15 days from the date of conversion. The intimation must be processed in Form 14. The Registrar, after completion of the requisite formalities, will issue a certificate of registration. If the Registrar denies conversion, the private limited company can file an appeal before the Court of law.

CONVERT PVT TO LLP

DOCUMENTS REQUIRED FOR CONVERSION OF COMPANY INTO LLP

The following documents have to be attached along with the application for conversion of company into LLP:

Consent of each of the shareholder of the company for conversion of the firm into LLP in the given format.

Incorporation document in Form 2.

Form 3- Form of application and declaration of incorporation of an LLP.

Clearance/no-objection certificate from tax authorities.

Statement of assets and liabilities from the company.

List of all the creditors along with their consent.

Approval from any other country.

Authorization to make declaration.

 Optional attachments, if any.

 

FREQUENTLY ASKED QUESTIONS

 
The LLP Act contains enabling provisions under which a firm (set up under IndianPartnership Act, 1932) and a private company or unlisted public company (incorporated underCompanies Act) would be able to convert themselves into LLPs. Provisions of clause 58 andSchedule II to Schedule IV to the Act provide the procedure in this regard.
This would not be allowed under the LLP Act. However, enabling provisions would be required to bemade in the Companies Act for such conversion. Necessary action in this regard would be takenwhen the Companies Act would be revised.
Since Stamp Duty is the subject reserved for the States, the LLP Act does not contain anyprovision for treatment of stamp duty issues. The stamp duty payable will depend upon therelevant Stamp Act prescribed by the State Government/Union Territory.
It has been provided in the Act that on the conversion of a firm/private company/unlisted publiccompany into LLP, any approval, permit or license issued to the firm/private company/unlistedthe company under any other Act shall, subject to the provisions of such other Act under which suchapproval, permit or license was issued, be transferred in the name of a converted entity via LLP.
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