Converting a Private Limited Company to a Limited Liability Partnership (LLP) involves several structured steps. Begin with a Board Resolution to approve the conversion, followed by shareholder consent via a special resolution filed with the Registrar of Companies (Form MGT-14). Obtain written consent from all proposed LLP partners. A Chartered Accountant must certify a Statement of Assets and Liabilities. Notify creditors, secure their consent, and ensure the conversion doesn’t harm them. Directors must declare shareholder agreement and creditor consent. Draft an LLP Agreement detailing partner roles, decision-making processes, and obligations. File Form FiLLiP for LLP registration, including consent letters, subscriber details, and office address proof. Ensure regulatory compliance by obtaining necessary NOCs and updating financial records like ITRs and GST filings. Close existing company bank accounts post-conversion. File Form 3 within 30 days of incorporation to register the LLP agreement and partner rights. Adhering to these steps ensures a smooth and legally compliant transition.
Step-by-Step Guide to Converting a Pvt Ltd Company into an LLP
1. Board Resolution for Conversion: The first step is for the Board of Directors to meet and formally approve the decision to convert the company into an LLP. This resolution sets the wheels in motion.
2. Consent from Shareholders: Once the board has approved the decision, the next step is getting shareholder consent. the shareholders need to give their approval. A special resolution is required, and you’ll also need to file Form MGT-14 with the Registrar of Companies (RoC).
3. Consent from Partners: All proposed partners of the LLP—including current shareholders and directors—must provide written consent. It’s important to get everyone on the same page.
4. Statement of Assets and Liabilities: Before you take the next step, it’s important to get a clear picture of the company’s finances.
A Chartered Accountant (CA) should certify a statement of assets and liabilities as of the conversion date.
5. List of Creditors
Prepare a list of all your creditors, including their
(i) name
(ii)addresses
(iii) Total outstanding amount.
You’ll need to notify them about the conversion and ensure they’re okay with it it’s advisable to take a written consent- either physically or electronically
6. Declaration by Directors
The directors of the Pvt Ltd company will need to confirm a few key points:
- All shareholders have agreed to the conversion.
- Creditors have been notified and their consent has been obtained.
- The conversion won’t harm creditors in any way.
7. LLP Agreement
Draft an LLP Agreement that lays out how the LLP will function, including:
- The roles and responsibilities of each partner.
- Decision-making processes.
- Rights, duties, and obligations of all partners.
8. Filing Form FiLLiP
This is the official application for LLP registration. Make sure to attach:
- The subscriber’s sheet.
- Consent letters from designated partners.
- Proof of the registered office address.
- DIN will be Sufficient for Designated partners
- In Case Any of the partner does not have DIN- Keep Basic KYC documents along with latest residential proof Handy
9. No-Objection Certificates (NOCs)
If any regulatory body or authority oversees your business, you may need to get their approval before completing the conversion. Don’t skip this step!
10. Tax and Legal Compliance
Make sure all your financial and legal records are up to date, including:
- Your latest Income Tax Return (ITR).
- GST filings, if applicable.
- Remember to close the company’s bank accounts after the conversion.
11. Filing of Form 3
- Once your LLP is Incorporated File Form-3 within 30 days of incorporation with all the rights and duties of partner and affix the original LLP Deed in the attachment
Got questions or need help with your Pvt Ltd to LLP conversion? Reach out to me—
I’m here to make the process simple and hassle-free for you!
CS Avikar N. Chaturvedi
Avikar@aacco.in
Author Bio
