Provisions and Compliances regulating the conversion of a private company into an LLP

Provisions and Compliances regulating the conversion of a private company into an LLP[1]

Pre-Conversion Compliances:

As per the LLP , Act

1.      Section 6: Minimum requirement of 2 partners

2.      Section 7: Minimum of 2 designated partners wherein at least 1 is a resident in India

3.      Section 56: Conversion of a private company into an LLP

4.      As per the 3^rd Schedule:

a.       there is no security interest in its assets subsisting or in force at the time of application;

b.      the partners of the limited liability partnership to which it converts comprise all the shareholders of the company and no one else;

c.       Statements to be filed:-

                                                              i.      statement containing the following particulars, namely:- (i) the name and       registration number of the company; (ii) the date on which the company was incorporated; and (b) incorporation document and statement referred to in section 11

As per the LLP Rules:

1.      Rule 10: Individual intending to become a designated partner to furnish a DPIN (as applied for to the Central Government under Form 7), consent to become a designated partner, Form 9 and 10

2.      Form 14 must be accompanied by the following attachments :

a.       Copy of Certificate of Incorporation of LLP formed.

b.      Copy of incorporation document submitted in Form 2 (with the Registrar of Firms) 

c.       Other optional attachments as may be required.

Conversion Compliances:

1.      Application shall be made in (E-Form 1) for the availability of the proposed name with the Registrar;

2.      Application for conversion has to be made in (E-Form 18) with the following attachments

a.       Statement of shareholders (may be attached in a tabular form);

b.      Incorporation Document & Statement in Form 2 filed electronically;

c.       Statement of Assets and Liabilities of the company duly certified as true and correct by the Chartered Accountant in practice;

d.      List of all the creditors along with their consent to the conversion (may be given in the form of a tabular statement);

e.       Approval of the governing council (In case of professional private limited companies); (Form 17)

f.       NOC from Income Tax authorities; 

g.      Approval from any other body/authority as may be required; (Form 17)

h.      Particulars of pending proceedings from any court/Tribunal etc;

i.        Rejection letter of Registrar of any earlier application for conversion;

j.        Particulars of convictions, rulings, orders, judgement of Courts in favour or against the private limited company which are subsisting;

k.      Other optional attachments as may be required;

3.      All the E-FORMS filed electronically thus Designated Partner of the proposed LLP needs to obtain a Digital Signature Certificate (DSC) from government recognized DSA’S;

4.      Board meeting: (Schedule 1 clause 8 and 9)

a.       Call meeting of board of Director.

b.      Pass Resolution for Conversion of Company into LLP.

c.       Pass Resolution to authorize any director to Apply for Name of LLP.

5.      Schedule 3: No pending:

a.       Income-tax return under the Income-tax Act, 1961;(Proposed finance Bill) 

b.      Prosecution initiated against or show cause notice received by the company for alleged offences under the Companies Act, 1956;

c.       Proceeding by or against the company is pending in any Court or Tribunal or any other Authority; (Schedule 3 clause 8)

d.      Conviction, ruling, order, judgment of any Court, Tribunal or other authority in favour of or against the company is subsisting;(Schedule 3 Clause 9)

e.       Clearance, approval or permission for conversion of the company into limited liability partnership is required from anybody/ authority. etc

Post-Conversion Compliances:

1.      As per the 3^rd Schedule:

a.       Registration of conversion and issue of certificate under Form 19 of the LLP Rules & Forms 2008;

b.      Registration in relation to property;

2.      Section 58: Registration and effect of conversion

a.       Notice of conversion to the Registrar

b.      Existence of the LLP as per the name specified in the certificate

c.       All tangible (movable or immovable) and intangible property vested in the firm or the company, shall be transferred to and shall vest in the limited liability partnership without further assurance, act or deed;

d.      Dissolution of the company and removal from the record of registrar

e.       For a year after conversion the LLP must state the flowing in its official correspondence: 

                                                              i.      a statement that it was, as from the date of registration, converted from a company into a limited liability partnership; 

                                                            ii.      the name and registration number of the company from which it was converted;

STEPS OF CONVERSION[2]:

S. NO.	PARTICULAR	REQUIREMENT
1.	Apply for Din No.	e-form DIR-3 with ROC-Process given in my earlier article
2.	Call BM- to change name – ending with word LLP
3.	File Form for Name approval with work LLP	E-form INC-1(Attached Board Resolution)
4.	ROC issue name approval certificate
5.	Incorporation documents with registrar	File e-form -2 ( Attached Incorporation Documents)
6.	Application of Conversion	e-form – 18(Attached Given Below)
7.	LLP Agreement- within 30 days of approval of above forms	e-form- 3(Attached LLP Agreement)
8.	If incorporation certificate is issued by department; then
9.	Intimation of Conversion to Registrar	e-form-14(Attached Given Below)

Requirements :

http://www.caclubindia.com/articles/procedure-of-conversion-of-private-ltd-company-into-llp-22182.asp#.VUNdyNyUeYl

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[1] http://www.mca.gov.in/Ministry/actsbills/pdf/LLP_Act_2008_15jan2009.pdf, Official MCA website, Last Visited 01/05/15

[2] http://taxguru.in/company-law/process-conversion-private-limited-company-llp.html#sthash.s8YtkaFS.dpuf

Last Visited 01/05/15