Pvt Ltd Company to LLP Conversion

A private limited company can be converted into an LLP. TheIf the company has no security interest in its assets at the time of application. The partners of the LLP will be no one but the shareholders of the company.

A Private Limited Company or Unlisted Public Company may convert into a Limited Liability Partnership in accordance with the provisions of Section 56 and the Third and Fourth Schedule of LLP Act, 2008.

The cost of registering LLP is low as compared to a company.

All limited companies have to get their accounts audited but in case of LLP there is no audit requirement unless the contributions of LLP exceeds Rs. 25 lakh or annual turnover exceeds Rs. 40 lakh.

The LLP has very limited compliances as compared to the Company. It has to file yearly income tax return and two documents with the RoC i.e. annual return and statement of accounts and solvency.

LLP is treated in par with the partnership firm. The provision of dividend distribution tax is not applicable on LLP. Also under Section 40(b) deductions are allowed on the interest given to partners, any payment of salary bonus commission or remuneration.

What is the need of Conversion from Company into LLP?

• LLP will have more flexibility as compared to a company.
• LLP will have lesser compliance requirements as compared to a company.

Process for Conversion of Company into LLP

• Call for Board Meeting and pass Board Resolution for the conversion of the company into LLP.
• Take the Written consent of all the shareholders for conversion of Company into LLP.
• File application for name availability in web based form ‘RUN-LLP’ with the RoC.
• Attach the Board Resolution and proposed object clause with the name availability application.
• Once the name is approved, execute all necessary documents like consent, subscriber sheet etc. and file form FiLLip and form 18 with the RoC.