Convert LLP to Private Limited Company
In India, private companies are one of the most common forms of business structure. They provide higher chances of growth, development and are best for raising equity capital which is not possible in case of LLP. LLP structure is not suitable if the owners require venture capitalist or private equity investors to invest in their company as they would choose to invest in a private limited company and not a partnership or LLP. The second reason for conversion is the that the FDI in case of a private limited company does not require any approval it can be done directly unlike in an LLP. Especially if the promoters or owners of the company are NRI’s or a foreigner incorporating a private limited company is a preferable choice over an LLP. Hence conversion is mandatory if the above-mentioned requirements need to be fulfilled.
Benefits of LLP to Private Limited Company Conversion
Easy Fund raising
Stringent registration process makes this structure more credible among other which makes fundraising or borrowing from external sources easier. The organization itself provides a number of ways to raise funds in form of private equity, ESOP, and more.
Separate Legal Existence
The separate ownership and management help both – the company and the management to focus on their potential works. The shareholders assign responsibility to operate and run the company without losing control in form of voting.
ESOPs to employees
Only private limited companies can offer stock ownership and ESOP plans. It attracts employees as it creates an incentive for them to work in the company and advantage with its growth and prosperity.
Limited Liability of Owners
The obligation or debts of the company does not create a charge over the owner’s personal assets. Their liability is limited only to the capital subscribed and unpaid by them.
Documents Required for LLP to Private Limited Company Conversion India
PAN Card
PAN Card of shareholders and Directors.
Foreign nationals may provide a passport.
Identity Proof
Voter ID/ Passport/ Driving License of Shareholders and Directors
Address Proof
Telephone Bill /Electricity Bill/ Latest Bank Account Statement of Shareholders and Directors
Photograph
Latest Passport size photograph of Shareholders and Directors
Business Address Proof
Electricity Bill/ Telephone Bill of the registered office address
NOC from owner
No Objection Certificate to be obtained from the owner(s) of registered office
Rent Agreement
Rent Agreement of the registered office should be provided, if any
Copy of ITR
A copy of the latest income tax return filed by the Limited Liability Partnership.
How to Register a One Person Company Online with CCA?
1. Fill the form given on the right 2. Select your package 3. Fill the company details 4. Pay the amount & done Once you done, our expert will contact you.
Frequently Asked Questions
1 What are the statutory requirements to be fulfilled once Private Company is registered?
Once, the company is registered, it should follow below-mentioned requirements on priority:
- Opening a current account of the company
- Appointment of Statutory auditor
- Deposit of paid-up capital mentioned while registration
- Issue and allotment of shares
2 How many DIN can be apply through SPICE Form?
Maximum 3 (Three) DIN can be applied through SPICE form.
If the applicant wants to incorporation Company with more than 3 Directors and more than 3 persons don’t have DIN. In such situation applicant have to incorporate Company with 3 Directors and have to appoint new directors later on after incorporation.
3 What is the minimum Capital Requirement?
While registration, minimum authorized capital of INR 1 Lakh should be provided. The requirement of minimum paid-up capital is eliminated as part of Government’s initiative to simplify business registration in India. However, each shareholder must subscribe at least 1 share for registration and amount sufficient to run business should be introduced.
4 How to file the Conversion form in case of more than 7 partners in the LLP?
In case of more than 7 partners in the LLP at the time of conversion into Company then Company have to file Scan copy of Physically prepared MOA & AOA and the company has to file 1. URC-1 and 2. INC-32.
5Whether at the time of Conversion whether Latest deed shall be attached in the form URC-1?
Yes, at the time of Conversion LLP have to file “copies of the principal and all subsequent deeds including the latest deed” with the ROC in e-form URC-1.
6Whether e-MOA & AOA can be file in case of MOA & AOA is signed by a person at a place outside of India?
Yes, if one of the directors is outside of India, it can be filed in an e copy format, no need of submitting a physical copy.
7Are shares of a private company easily transferable?
Yes, shares of Private Company are easily transferable among members of the company but for transferring the shares to a non-member, the share should be first offered to an existing member and if he refuses to purchase the same, the shares can be transferred to non-members.
8Can a foreign director be appointed after the conversion of LLP into private limited company and what are the documents required for filing DIN ?
Yes, a foreign national can be a director. For procuring DIN, details of a valid passport should be filled in form DIR-3 and a certified copy of same should be attached with DIN application. All supporting documents including photograph should be certified by the Indian Embassy or a notary in the home country of the applicant or by the Managing Director / CEO / Company Secretary of the company registered in India, in which applicant is a director. If a foreign director has a valid multiple-entry Indian visa or Person of Indian Origin card or Overseas Citizen of India card, then the attestation could also be done by Public Notary / Gazetted Officer in India or practicing CA / CS / CWA.
9Can a Private Company carry multiple businesses after conversion from the LLP?
Yes, a private company can carry multiple businesses after conversion from the LLP, it does not have any restrictions.