Written by : AK Agrawal
An experiences Chartered Accountant and Techno-Functional consultant working in industry for over 10 years dealing with multinational corporate clients. He is loves reading latest trend of technology trend.
In the entrepreneurship domain, over the past decade, LLPs have emerged as the most desired forms of business ventures. Business entities need to understand the relevance of evolution in their operations. If the Pvt. Ltd Company structure is not functioning for a business, its management must realize when is the time for a change. This article discusses the notion of converting a Pvt Ltd Company into an LLP.
An LLP is a perfect mixture of a Pvt. Ltd Company and a Partnership firm. It is ideal for small and medium-sized businesses. As a result of its numerous advantages, Limited Liability Partnerships (LLP) are gradually becoming a popular type of entity.
It is an alternative corporate business structure that combines the benefits of a company's limited liability with the freedom of partnerships. LLPs in India get controlled as per the Limited Liability Partnership Act of 2008, which went into effect on April 1, 2008. This Act was introduced to promote Micro, Small, and Medium Enterprises. When opposed to other forms of business companies, LLP registration offers the benefit of self-governance and reduced compliance.
A Pvt Ltd Company can be transformed into an LLP in the following situations:
Obtain DIN for those specified partners who do not already have DIN. The minimum number of authorized partners required to form an LLP is two. One amongst them must be a resident Indian. DIN is presently only assigned at the time of incorporation or when a person is appointed as a director or designated partner in a business or an LLP.
As a result, to get DIN, such individuals must first be appointed as directors in the business. Those who want to become designated partners will need to have a DIN. Furthermore, it is necessary to apply for a DSC before applying for a DIN. A Body Corporate could also be a participant in a Limited Liability Partnership through a nominee.
The organization must apply to reserve the LLP's name and get a NAME APPROVAL CERTIFICATE FROM ROC.
Fill out E Form FiLLiP and submit it to ROC with the accompanying attachments:
Form 18 is the form used to convert a corporation into an LLP. However, it must be filed along with the Form for Incorporation.
Fill out E-FORM-18 and submit it to ROC along with the accompanying ATTACHMENTS:
Following completion of all requirements by the company and approval by the Ministry, the ROC will issue a COI for the conversion of an LLP.
The following are the contents of the agreement:
This form contains information regarding the LLP Agreement that the partners have agreed to. This form must be submitted within 30 days of the firm being converted into an LLP.
LLP Agreement must be included.
It must be filed within 15 days of the date of conversion after receiving the LLP's incorporation certificate.
E-FORM 14 ATTACHMENTS:
The following are some of the consequences of converting a corporation into an LLP:
The company must notify the relevant authorities of the conversion and make the required modifications to all registrations and licenses.
Because of the flexibility in its form, compliances, taxation, and operation, LLP would be beneficial to small and medium-sized businesses in general. LLPs are the preferred company structure across the world, particularly in the service industry or for operations involving experts. The present company structure can be converted to an LLP while preserving the benefits of limited liability. Therefore, GoTaxfile assists you with the same. It makes the process quite easy for you without you worrying about anything.
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