Conversion of Private Limited company to Limited Liability Partnership (“LLP”)
Why Choose Dastawezz ?
A company owned privately for businesses which are small in size is called a Private Limited Company whereas an LLP is a hybrid of a company and a partnership where each partner’s liability is limited to his/her contribution to the capital.
- First, as a prerequisite for conversion, every member of the company should agree to convert and become a partner of the LLP. Latest tax return is to be filed with ROC and No objection certification form creditors is to be obtained.
- Then, a board meeting is to be convened for passing of resolution for conversion and filing of the same with the Ministry for Corporate Affairs.
- Next, application for availability of name is filed and so is the incorporation form with the required documents
- Next, the application for conversion is filed with ROC and once approved, the ROC issues a certificate of incorporation for the LLP.
- As a next step, the LLP agreement is drafted and filed in the appropriate form.
ADVANTAGES / FEATURES
- It is a separate legal entity which can sue and be sued in its own name.
- There is no distinction between who owns and manages the business since partners do both unlike what happens in a company.
- Partners have flexibility in the type of agreement they want to create outlining their rights and duties.
- There is limited liability of partners only to the extent of their contribution.
- An LLP has fewer compliance requirements in comparison to a company.
- Also, an LLP is easy to wind-up in comparison to a company.
Statement of consent from shareholders, NOC from creditors, audited accounts and copy of acknowledgment of latestIT return.