Unlisted Public Company or Private Company conversion into LLP leads to greater flexibility.
Limited liability partnership is a hybrid form of both the company and the partnership firm. In order to avail the benefits like flexible legal structure, no dividend distribution tax and unlimited no of member private limited company/unlisted public company may convert themselves into the limited liability partnership.
Process of converting Company into LLP is as follows-
Step-1-Acquiring Digital signature Certificate
In order to validate the documents submitted electronically, a valid DSC shall be attached to it. Thus every designated partner is required to obtain a valid DSC.
Step-2-Obtaining Designated Partner Identification Number
To incorporate an LLP at least two directors are required and one of them shall be Indian resident. All the directors chosen as designated partners who do not possess a valid DIN are required to obtain DPIN.
Step-3- Submission of Form-1 for name approval
To apply for reserving the name of the LLP form-1 shall be submitted to the ROC. Further, in case of conversion of the company the name of the existing company shall be applied as the name of the proposed LLP.
Step-4- filing incorporation documents in form 2
Form 2 containing the following basic information about the firm shall be filed-
• The registered office address of the proposed LLP.
• Capital contribution of each designated partner.
• Detail of LLP(s) and/ or company(s) in which partner/ designated partner is a director/ partner
Step-5- Filing of Form 18 for application of conversion
Form 18 containing the following details shall be submitted-
- Statement of shareholders.
- Statement of Assets and Liabilities of the company duly certified as true and correct by the auditor.
- List of all the Secured creditors along with their consent to the conversion.
- Approval of the governing council (In case of professional private limited companies)
- NOC from Income Tax authorities and Copy of acknowledgment of latest income tax return.
- Approval from any other body/authority as may be required.
- Particulars of pending proceedings from any court/Tribunal etc.
Step-6-filing of Form 3
Form-3 provides information in respect to the LLP Agreement entered into between the partners. An LLP agreement shall be attached with this form.
Step-7- certificate of incorporation
After being satisfied with the documents and forms submitted the certificate of incorporation will be granted to the proposed limited liability partnership.
Further, every LLP is required to file form 14 with the registrar within 15 days of receipt COI to intimate the registrar about the conversion.