CONVERSION OF COMPANY INTO LIMITED LIABILITY PARTNERSHIP
The LLP Act contains enabling provisions pursuant to which a firm (set up under Indian Partnership Act, 1932) and private company or unlisted public company (incorporated under Companies Act) would be able to convert themselves into LLPs. Provisions of clause 58 and Schedule II to Schedule IV to the Act provide procedure in this regard.
PRE-REQUISITES FOR CONVERSION OF COMPANY INTO LLP
- There is no security interest in its assets subsisting or in force at the time of application
- The partners of the LLP to which it comprises all the shareholders of the Company and no one else.
- No eForms should be pending for payment or processing in respect of the Company.
- No open (unsatisfied) charges should be pending against the Company.
- At least one balance sheet and annual return should have been filed by the Company after its incorporation.
PROCEDURE OF CONVERSION AS PER COMPANIES ACT
- Convene a Board Meeting to pass resolution for conversion of Company into LLP.
- Reserve the name using RUN-LLP as available mca.gov.in (not mandatory as the same can be reserved along with application to incorporate LLP as well)
- File form for incorporation of Limited Liability Partnership (FiLLiP).
Upon approval of eFORM-18 itself, the status of the company will be changed to ‘Converted to LLP’.
FILE FORM 3
File Form 3 within thirty days of incorporation of LLP attaching the LLP agreement mentioning therein the terms and conditions of Limited Liability Partnership among the partners.
FILE E-FORM -14 (INTIMATION TO ROC)
After receiving incorporation certificate of LLP it has to be filed within 15 days of the date of conversion.
FILE FORM 3
The following are some of the implications due to the conversion of a company into a LLP:
- The private company is dissolved after conversion.
- The name of the private limited company will remove from the register of the ROC.
- The conversion will not affect existing liabilities, obligations, agreements, contracts and continued employment.
Company has to intimate all the authorities concerned about the conversion and make necessary changes in all the registrations and licenses.
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