Article explains Conversion of LLP into Company under Companies Act, 2013 and explains about Companies capable of being registered Relevant Section 366, Resolution in General Meeting required to be passed Section 366(2), Rule 3(1) of the Companies (Authorized to Register) Rules 2014, Information and documents required to be filed with registrar Rule 3(2), Verification under rule 3(5), Mandatory requirement for Conversion of LLP into Company, Certificate of Registration Section 367, Vesting of property Section 368, Existing Liabilities Section 369 and Continuance of legal proceedings against Converted Company.
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Conversion of LLP into Company |
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| 1. | Companies capable of being registered Relevant Section 366 | Subject to the provisions contained in this section, any LLP formed under Limited Liability Partnership Act, 2008 and consisting of Two or more members, can registered itself as-
1. An Unlimited company, or 2. As a Company limited by shares, 3. As a Company Limited by guarantee, as per rule 3 of Companies (Authorized to Register) Rules 2014. |
| 2 | Resolution in GM required to be passed Section 366(2) | Assent of a majority of its members as are present in person, or by proxy, at a general meeting summoned for the purpose of registering as Company shall be required. |
| 3 | Rule 3(1) of the Companies (Authorized to Register) Rules 2014 | For the purpose of section 366(2) of the Companies Act, the provision contained in the provisions of chapter II of the Companies Act, 2013 shall be applicable mutatis mutandis like name approval n all.
Additional requirements There shall be 2 or more members for the purpose of registration of LLP as a Company LLP with less than 7 Partners shall be registered as Private Company. |
| 4 | Information and documents required to be filed with registrar Rule 3(2) | Following information and documents shall required to be filed in form URC. 1 to the registrar.
1. A proper application by LLP for registration as company limited by shares- a. Names, addresses, and occupation of all the partners with details of their share respectively; b. A details showing- i. shares allotted for consideration in cash; ii. In consideration other than cash and iii. source of consideration and No. of shares, who on a day, not being more than 6 clear days before the date of application of registration, were partners of the LLP or firm as the case may be. c. Particulars of the First directors of the Company like i. DIN; II. Passport No, if any along with expiry date; iii. Address proof; iv. Their interest in any other firm or body corporate, v. DIR-2 d. LLP Agreement e. NOC from all the secured Creditors f. written consent from majority of member, present in person or through proxy at GM, agreeing for such registration; g. Undertakings that the provision of the Indian stamp Act shall be complied by the proposed directors; h. Copy of recent Income tax return of LLP; 2. In case application by LLP for registration as company limited by guarantee or as an unlimited company- a. list of persons (their names, address, occupation), who on a day, not being more than 6 clear days before the date of seeking registration, were partner of LLP, with proper proof of their membership; b. . Particulars of the First directors of the Company like i. DIN; II. Passport No, if any along with expiry date; iii. Address proof; iv. Their interest in any other firm or body corporate, v. DIR-2 c. LLP Agreement d. Where LLP intents to be registered as a Company limited by guarantee, a copy of the resolutions declaring the amount of guarantee. e. NOC from all the secured Creditors f. written consent from majority of member, present in person or through proxy at GM, agreeing for such registration; g. Undertakings that the provision of the Indian stamp Act shall be complied by the proposed directors; h. Copy of recent Income tax return of LLP; Public Advertisement: Advertisement shall be in Form No. URC. 2 which shall be published in a newspaper in English and in any vernacular language, circulating in the district in which LLP is situated. The copy of the notice served on Registrar along with proof of service, shall be attached with Form No. URC. 1. Statement of Accounts, prepared not later than 15 days prior the date of seeking registration and shall be duly certified by the Auditor together with the audited financial statements of last year, shall be attached with Form URC-1 A Statements of proceedings in any pending against the LLP shall also be attached with Form URC-1 |
| 5 | Verification under rule 3(5) | The List of members and directors and any other relevant particulars which are required to be filed with Registrar shall be duly verified by the proposed directors of the Company. |
| 6 | Mandatory requirement | A LLP shall be registered as per section 366 as Company limited by shares only if-
a. Company has a permanent paid-up or b. Nominal share capital of fixed capital of fixed amount of dividend, c. Fixed amount, or held and transferable as stock, or dividend; d. held partly in the one way and partly in the other, and formed on the principle of having for its members the holders of those shares or that stock, and no other persons; |
| 7 | Certificate of Registration Section 367 | After following the provisions of such chapter and on payment of such fees, the Registrar shall certify under his hand the LLP applying for registration is incorporated as a Company under this Act and thereupon the Company shall be so incorporated.
Registrar shall issue certificate of Incorporation in Form No. INC-11 |
| 8 | Vesting of property Section 368 | All property of LLPs after registration shall be vest to the Company registered under section 366. |
| 9 | Existing Liabilities Section 369 | Any liabilities or rights in respect of any debts or obligations incurred or any contract entered into by, to, with, or on behalf of LLP before registration shall be inforce after the registration. |
| 10 | All legal proceedings shall continue Section 370 | All suits and other legal proceedings taken by or against the company, or any public officer or member thereof, which are pending at the time of the registration of a company in pursuance of this Part, may be continued in the same manner as if the registration had not taken place:
Provided that execution shall not issue against the property or persons of any individual member of the company on any decree or order obtained in any such suit or proceeding; but, in the event of the property of the company being insufficient to satisfy the decree or order, an order may be obtained for winding up the company in accordance with the provisions of this Act or of the Insolvency and Bankruptcy Code, 2016 . |
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