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CONVERSION OF UNLIMITED LIABILITY COMPANY INTO LIMITED LIABILITY AND VICE –VERSA

Procedure to convert Unlimited Liability Company into Limited Liability Company:

  • Send notice to directors for convening board meeting as per section 173 and Secretarial standards SS-1.
  • Convene and hold BM.
    • To consider the proposal of conversion.
    • To approve amendment in Articles of association by Special resolution in General Meeting.
    • To authorize director or any other eligible person to carry out the effect and all necessary acts required.
    • To fix the date, time, venue of General meeting and authorize director or any other eligible person to carry out the effect and all necessary acts required.
    • To consider the list of creditors/ debenture holders and amount thereof.
  • Company to send notice to members u/s 101 and SS-2 for convening General Meeting.
  • Duly convene and conduct General meeting and pass a special resolution regarding conversion .
  • Company shall authorize a person to file MGT-14 and INC-27 with Registrar of Companies.
  • Company shall within seven days from the date of passing of the special resolution in a general meeting, publish a notice of such conversion in two newspapers, one in vernacular newspaper and one in English newspaper in form INC-27A.
  • Company shall within 45 days of passing special resolution file an application with all relevant documents as are prescribed with the registrar of companies.
  • Registrar of Companies after considering the documents filed shall issue the Certificate of Incorporation in INC-11A upon grant of approval for conversion.

Procedure to convert Limited Liability company into Unlimited liability company:

  • Send notice to directors for convening board meeting as per section 173 and Secretarial standards SS-1.
  • Convene and hold BM:
    • To consider the proposal of conversion.
    • To approve amendment in Articles of association by Special resolution in General Meeting.
    • To authorize director or any other eligible person to carry out the effect and all necessary acts required.
    • To fix the date, time, venue of General meeting and authorize director or any other eligible person to carry out the effect and all necessary acts required.
    • To consider the list of creditors/ debenture holders and amount thereof.
  • Company to send notice to members u/s 101 and SS-2 for convening General Meeting.
  • Duly convene and conduct General meeting and pass a special resolution regarding conversion .
  • Company shall authorize a person to file MGT-14 and INC-27 with Registrar of Companies.
  • Registrar of Companies on being satisfied shall issue a Certificate of Incorporation in INC-11B.
  • An Unlimited Liability Company shall not be eligible for conversion into a company limited by shares in case –
    • Its net worth is negative, or
    • An application is pending under the provisions of the Companies Act, 1956 or the Companies Act, 2013 for striking off its name, or
    • The company is in default of any of its Annual Returns or financial statement under the provisions of the Companies Act, 1956 or the Companies Act, 2013, or
    • A petition for winding up is pending against the company, or
    • The company has not received amount due on call in arrears , from its directors, for a period of not less than six months from the due date, or
    • An inquiry, inspection or investigation is pending against the company.

The Registrar of Companies shall take a decision on the application filed under these rules within 30 days from the date of receipt of application and thereafter issue the certificate.

 
     
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