Summary: This guide outlines the procedure for converting a private limited company into a Limited Liability Partnership (LLP) as per Sections 56 and 58 of the LLP Act, 2008, read with rules 39 and 33, and Schedule III. Eligibility requires that the company has no outstanding security interests in its assets at the time of application, and all company shareholders must become partners in the LLP. The conversion process involves several steps: holding a Board Meeting to approve the conversion and proposed LLP name, applying for the LLP name via RUN-LLP, and conducting a General Meeting to pass a Special Resolution for the conversion. Subsequently, Form MGT-14 must be filed within 30 days of the Special Resolution. Following this, Form FiLLiP and Form 18 are submitted for the conversion application. Upon satisfaction, the Registrar will issue a Certificate of Registration in Form 19. Finally, Form 3, the LLP Agreement, must be filed within 30 days of the conversion. A Director Identification Number (DIN) can serve as a Designated Partner Identification Number (DPIN), but a DPIN is not valid for a director’s appointment in a company. Note that Form 14 is not used for company-to-LLP conversions, and if a shareholder opts not to become an LLP partner, their entitlement is acquired by the remaining shareholders.
PROCEDURE FOR CONVERSION OF PRIVATE LIMITED INTO LLP
1. APLLICABLE PROVISIONS:
Section- 56 and 58 of Chapter X of the LLP Act, 2008 read with rule 39 and rule 33 and Schedule III:
2. ELIGIBILITY:
I) A Company may apply to convert into a limited liability partnership in accordance with this Schedule, only if:
a. there is no security interest in its assets subsisting or in force at the time of application; and
b. the partners of the limited liability partnership to which it converts comprise all the shareholders of the company and no one else.
II) Upon such conversion, the company, its shareholders, the limited liability partnership into which the company has converted and the partners of that limited liability partnership shall be bound by the provisions of Schedule that are applicable to them.
3. PROCEDURE:
1. Hold Board Meeting – Take the following Agendas:
- Approval of proposed name of the LLP;
- Approval for conversion of the Private Limited Company into LLP;
- Approval of notice for calling of Extra Ordinary General Meeting.
2. Apply for the name of proposed LLP by filing RUN-LLP. Attach the Board Resolution.
3. Hold the General Meeting (EGM) and pass the Special Resolution (SR) and take the approval of all shareholders for the proposal to convert the Company into a LLP
4. File form MGT-14 within 30 days of passing SR u/s 117 of the Companies Act, 2013
5. File Form- FiLLip and file Form 18 regarding Application & statement for Conversion of a private Company into LLP.
6. If the registrar is satisfied, he will issue a Certificate of registration under his seal in Form 19.
7. File Form 3 as LLP Agreement with the Registrar of LLP within 30 days of the conversion of Company into LLP/Registration of Company as LLP.
SPECIAL NOTES
- An individual holding a Director Identification Number (DIN) is not required to obtain a separate Designated Partner Identification Number (DPIN) for serving as a designated partner in an LLP. However, if a Designated Partner wishes to transition into a company and be appointed as a director, they must apply for a DIN through Form DIR-3, as the DPIN does not fulfill the requirements for a director’s appointment in a company.
- Form 14 is not applicable for the conversion of companies into LLPs; it is applicable only in cases of conversion of a firm into an LLP.
- If any shareholder does not want to become a partner of the LLP then the remaining shareholders of the converting company will acquire the entitlement of the dissenting shareholder.
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