Want to convert Pvt Ltd into LLP?
Call us +91-9524230000

Conversion of Private Limited Company into Limited Liability Partnership (LLP)

Conversion Process, Legal Formalities and ROC Compliances, Documents, expenses
WE CAN ASSIST YOU HERE # +91-9524230000

Limited Liability Partnership (LLP) is a form of business entity which provides the benefits of limited liability of partnership along with allowing the members to enjoy the flexibility of organizing their internal management on the basis of a mutually arrived agreement. In Limited Liability Partnership – there are less compliance, less ROC fee and non-applicability of Dividend Distribution Tax on distribution of profits among partners. As compared to this, in Private Limited Company there are provisions for mandatory board meeting, maintenance of statutory records and high ROC fee which makes it cost consuming for small companies. Hence to reduce the compliance burden, you can opt for conversion of your Private Limited Company into Limited Liability Partnership if the expected turnover below Rs 40 lakhs or Capital contribution less than RS 25 Lakhs post conversion. n a November 2018 order the Mumbai Income Tax Appellate Tribunal held that the conversion to an LLP is a taxable transfer if the conditions stipulated in clause xiiib of section 47 of the ITA are not satisfied but that if the conversion takes place at book value, no capital gain would arise to the company.

How to take our Professional Service?

Procedure of conversion of Private Limited Company into Limited Liability Partnership

We Provide Hassle Free Professional Service and Advisory here

Conduct Board Meeting

Convene and Hold Board Meeting and take approval of board members for conversion of company into LLP

Reserve Unique Name

File RUN (Reserve Unique Name) for name approval (you can also file for name with Form FiLLiP but suggestible is to get name approved in advance in order to remove any hurdle in name)

File Form FiLLip

File Form FiLLip selecting the option of conversion of private limited company into Limited Liability partnership from dropdown list in form

File Form 18

File Form 18 - Application and Statement for conversion of a private company into limited liability partnership (LLP) – this form is to be filed with Form FiLLip.

Incorporation Certificate

Once the Form 18 Approved, ROC issue Certificate of Incorporation

LLP Agreement

Next step is to prepare LLP Agreement and file Form 3 ( with attachment of LLP Agreement) with ROC.

Submit Form 14

Lastly prepare Form 14 and submit in physical with Registrar of Companies along with Certificate of incorporation within 15 days of receiving of certificate.

Documents Requirement for Conversion of Private Limited Company into LLP

Statement of consent of shareholders
Subscribers' sheet including consent from designated partners
Proof of address of registered office of LLP with utility bill (utility bill should not be older than 30 days)
CTC of board resolution for approval of board members for conversion of company into LLP
PAN and address proof of subscribers and designated partners
Details of Companies/LLPs in which the partners/designated partners are Directors/Partners or Designated Partners.
Statement of Assets and Liabilities of the company duly certified as true and correct by the auditor
List of all creditors along with their consent and amount due
Approval from any other body/ authority, if any applicable
Copy of acknowledgement of latest income tax return

Pre-requisites for conversion of Private Limited Company into Limited Liability Partnership

No eForms should be pending for payment or processing in respect of the company
No open (unsatisfied) charges should be pending against the company
Company should be having share capital
Section 8 company is not eligible for conversion here
At least one balance sheet and annual return should have been filed by the company after its incorporation
The total value of assets as appearing in the books of account of the Company in any of the previous three years does not exceed Rs. 5 crores.

Benefits of Conversion of Private Limited Company into LLP

Know how the Conversion would be beneficial for you!

Separate Legal Existence and Limited Liability
Easy Financial Planning
Perpetual Succession
Minimal compliance to be made
Easy to establish, manage and run
No requirement for minimum capital contribution
No restrictions as to maximum number of partners
Personal assets of the partners are not affected, except in case of fraud
Affordable Borrowing facilities as compared to other form of organisations

Our Professional Fees & Expenses

Professional Fee

15000

Buy

Note : Govt. Fee and legal expenses payable as per actual and not included in above professional fee

How to Proceed?

Frequently Asked Questions

What is Limited Liability Partnership (LLP)?
- Limited liability partnership (LLP) is a partnership in which all the partners (including the Designated Partners) have limited liabilities. It therefore exhibits elements of partnerships and form of corporate body. LLP have the advantages of both the forms of organisations i.e. the Company and Partnership into a single entity. Limited Liability Partnership is regulated by the LLP Agreement and the Limited Liability Partnership Act, 2008, the LLP Rules, 2009 and the Ministry of Corporate Affairs.
Would there be any stamp duty exemption in case of conversion of Company into LLP?
- The Stamp Duty is subject matter of the respective State Jurisdiction. The LLP Act, 2008 does not contain any such provision for treatment of stamp duty issues. The stamp duty payable upon the conversion of the Company into LLP is only on the LLP Agreement to be entered into between the Partners of the LLP after conversion and the same will depend upon the relevant Stamp Act as prescribed by the respective State Governments / Union Territory.
Whether every LLP would be required to maintain and file accounts, is audit applicable to the LLPs?
- Every LLP is under obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A Statement of Accounts and Solvency shall be filed by every LLP with the Registrar of LLP every year.
  As per the applicable provisions of the LLP Act, 2008, every LLP whose capital contribution is exceeding INR. 25 Lakhs or the Turnover Exceeds INR. 40 Lakhs then Audit by Statutory Auditor becomes mandatory and the Statement of Accounts and Solvency will be accompanied by an Audit Report.
Whether foreign individuals or entities can become partners if the Private Limited Company having the Foreign Promoters is converted into the LLP?
- Reserve Bank of India has issued guidelines for incorporation of the LLP by Foreign individual or entities incorporated outside India. Pursuant to this permission, now the LLPs can have foreign individual or entities incorporated outside India as partners or Designated Partners. Conversion process does not affect their eligibility of being partners in the LLP. Only a compliance of intimation to the RBI needs to be done additionally.
Who shall be liable to pay tax in case of non-compliance of any of the conditions laid down in Section 47(xiiib) of the Income Tax Act, 1961, after conversion?
- The amount of profits or gains arising from the transfer of such capital asset or intangible assets or share or shares not charged under section 45 by virtue of conditions laid down in the said proviso shall be deemed to be the profits and gains chargeable to tax of the successor LLP or the shareholder of the predecessor company, as the case may be, for the previous year in which the requirements of the said proviso are not complied with.
What shall happen to the accumulated loss or the accumulated depreciation, if any standing in the financials of the Company?
- The accumulated loss and the un-absorbed depreciation of the predecessor Company, shall be deemed to be the loss or allowance for depreciation of the successor LLP for the purpose of the previous year in which business re-organisation was effected.

Income Tax Implication on conversion of company into LLP

Income Tax Provision on Conversion of Private Limited Company into LLP
AAR rules that shareholder is taxable on conversion of company into LLP

Conversion of Private Limited Company into Limited Liability Partnership (LLP)