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What is the process of converting an LLP into a Private Limited Company?
The conversion involves approval from partners, securing DSC & DIN for directors, obtaining name approval via RUN, and filing Form URC-1 and SPICe+ with MCA. Post-approval, a new Certificate of Incorporation is issued.
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Is it legally allowed to convert LLP into a Private Limited Company in India?
Yes, as per Section 366 of the Companies Act, 2013 and relevant rules, LLPs can be converted into Private Limited Companies subject to certain conditions.
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How many partners are required in an LLP to be eligible for conversion?
A minimum of 2 partners must be present in the LLP before conversion, and they must become directors/shareholders in the new Private Limited Company.
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What are the prerequisites for LLP conversion?
The LLP must have no pending litigation, at least 2 designated partners, and 2 or more shareholders. It must also have updated filings with ROC and Income Tax.
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Do I need to dissolve the LLP before conversion?
No. The LLP is not dissolved; instead, it is converted into a new company and ceases to exist after the issuance of the new incorporation certificate.
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Will the PAN and TAN of the LLP remain the same post-conversion?
No. Since a new entity is created, you need to apply for a new PAN and TAN for the Private Limited Company.
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Do I have to close the LLP bank account after conversion?
Yes. A new bank account must be opened in the name of the converted Private Limited Company, and the LLP account should be closed after settling obligations.
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Is capital gain tax applicable on conversion?
Generally, conversion is not treated as a “transfer” under the Income Tax Act if conditions are fulfilled. However, professional advice is recommended to check tax impact.
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Is stamp duty applicable on conversion from LLP to Pvt Ltd?
Yes, stamp duty is applicable on the transfer of movable or immovable assets during conversion, depending on the state laws.
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Can foreign nationals be shareholders in the new company?
Yes. The converted Private Limited Company can have foreign shareholders, but FDI norms under FEMA must be followed.
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What documents are required for conversion of LLP to Pvt Ltd Company?
Key documents include LLP agreement, certificate of incorporation, ID & address proofs of partners, utility bills, NOC from creditors, and board resolution.
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How long does it take to complete the conversion?
It typically takes around 20 to 30 working days, depending on document readiness and MCA processing time.
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Do I need fresh registration under GST and other licenses?
Yes. Since the converted entity has a new identity, fresh registration under GST, Shop Act, IEC, etc. is required.
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Can the company retain the same name as the LLP?
Yes, provided the name is available and does not conflict with existing company names as per MCA records.
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Will the LLP’s past liabilities transfer to the new company?
Yes, all debts, liabilities, and obligations of the LLP are inherited by the newly incorporated Private Limited Company.
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What is Form URC-1 used for?
URC-1 is filed for converting an existing entity (LLP, firm, etc.) into a company under the Companies Act, 2013.
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Is NOC from creditors required?
Yes. You must obtain a No Objection Certificate from all creditors of the LLP for a smooth conversion process.
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Can an LLP with FDI be converted into a Private Limited Company?
Yes, but only if the LLP complies with FDI policy and sectoral caps. RBI approval may be needed in specific cases.
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Is audit mandatory after conversion?
Yes. Once converted, the Private Limited Company must follow Companies Act audit norms, even if turnover is low.
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Can I get professional help for the conversion process?
Absolutely. EbizFiling offers complete assistance from documentation and filing to post-conversion compliances for a smooth and hassle-free process.