Conversion of LLP into Company:
An existing LLP can get converted into a Private Limited Company by complying with the provisions contained in Section 366 of the Companies Act, 2013 and Company (Authorised to Register) Rules, 2014.
However, there are various requirements which need to be satisfied for converting an LLP into a Private Limited Company, as follows:
- An LLP must have at least 7 partners, approval from all the partners is required;
- Advertisement in newspaper is to be done in a local and a national newspaper;
- A No Objection Certificate (NOC) is required from the ROC where such LLP is registered and then all the incorporation process has to be undertaken.
Steps in converting an LLP into a Private Limited Company:
- Name Approval has to be obtained from the Registrar of Companies (ROC) by submitting an application in e-format.The name once accepted by the authority will be valid for 60 days.
- In case all 7 members, who are future directors of the company after conversion, do not have the Digital Signature Certificate (DSC) and Director Identification Number (DIN), must be obtained. For obtaining the DIN, an application form must be filed on MCA portal. Once, the DIN application is processed & approved by central government via the office of regional director, the ministry of corporate affairs. The form must be accompanied by self-attested address proof and identity proof with 1 recent passport size color photo of the applicant. All the required documents should be attested by a practicing cost accountant or a practicing chartered accountant or a practicing company secretary.
- After getting the approval of name from Registrar of Companies, the applicant must prepare & file the Form URC-1 in addition to the following documents:
- List of the members with various details viz. names, address, shares held by them, etc,.
- List of the first directors of the private company with various details viz. names, address, the DIN, passport number with an expiry date, etc,.
- An affidavit from every person proposed as first directors, that he is not banned to be a director under section-164 and all the necessary documents filed with the registrar for the registration of firm must contain information which is complete, correct and true to be best of his belief and knowledge.
- A list including the names & addresses of partners of LLP, a copy of LLP agreement and certificate of registration duly verified by two designated partners of LLP must be enclosed.
- A statement indicating the following specifications:
- the nominal share capital of firm & the number of shares into which it is separated;
- the number of shares taken & the amount paid for each share;
- the name of the firm, with the addition of word Limited or private limited is required.
- A written consent or No objection certificate from all creditors.
- A copy of an advertisement in newspaper, statement of accounts of the company which must not be 6 days preceding the date of the application and it must be duly certified by the auditor.
4. Memorandum of Association (MOA) & Articles of Association (AOA) is to be formulated and then, filed with the ROC after getting the name approval and sanction of Form No. URC-1 from the registrar.