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LLP TO COMPANY

All about Limited liability partnership

Conversation of LLP Into Company

Corporatization is of great importance. Business is being expanded gradually towards the worldwide market without trade obstacles between nations. With the development of a great idea into a startup, with cultural and social benefit of corporate with the extraordinary participation of business. With following two way an entity come under the corporate world.

By conversation of exiting the business in Company. e.g LLP TO Company
Incorporation of the new entity.

The first method is now practical for the existing entities for conversation of the constitution of another.

The conversion process is a step-by-step procedure with the technical process with expert knowledge and time and cost-saving.

 

Advantages of conversation

No Capital Gain: there is no capital gain if the company under the conversation process and assets are being transferred.

A list of the following documents are required for conviction of LLP Into Company

 

The company has to file e-form URC- 1 along with all the below mentioned documents:

A list of all persons along with details of the names, addresses, and occupations in the existing entity and for member details with a contribution.
A list person or proposed director of the company.
an affidavit from all person proposed as the first directors, that he is not disqualified to be a director under sub-section (1) of section 164 and for registration, all the documents filed with the Registrar of the company contain all information which is correct and complete and true to the best of his knowledge and belief
A-List of partner containing the name address in their contribution in the Limited Liability Partnership
Copy of LLP Agreement
a statement of assets and liabilities of the Limited Liability Partnership duly certified by a practician chartered accountant which is made as on a date not earlier than thirty days of the filing of form no.URC-1
a fresh copy of the income tax return of the Limited Liability Partnership
an undertaking that the proposed directors shall comply with the Indian Stamp Act, 1899 (2 of “1899)
Consent from All the creditors.
Consent from all existing partner
Statement mention the following particulars:—
the nominal share capital of the company
the shares into which it is divided;
the number of shares which are taken and the amount paid on each share;
Proposed name of the company, with the significance.
The company required to file with e-form INC-32/ INC-33/ INC-34 along with URC-1 as linked form with all the attachment as required in normal Incorporation of Company like MOA & AOA
INC-9
DIR-2 etc.

Frequently Asked Questions

Two or more partners are also converting the existing LLP into private company and in the case of public company minimum 3 partners or more can convert LLP into public company

When the LLP firm converted into the company then no capital gains arising to the firm. Because at the time of conversion under Part IX of the Companies Act, 2013 the properties of the firm remain in the limited company as they exist. There is no dissolution of the LLP firm. Therefore section 45 (1) of the Income Tax Act of capital gains is not applicable in this case.

To get the tax benefits the same shareholding of the partners before conversion is to be maintained the former partners of LLP cannot have a total shareholding which is to be less than 50 percent for consecutive five years in the newly formed private limited company.

In case of more than 7 partners in the LLP at the time of conversion into Company then Company has to file a Scan copy of physically prepared MOA & AOA.

In the above-mentioned situation, the company has to file 1. URC-1 and 2. INC-32. No need for INC-33 and INC 34 in the above-mentioned situations.

Maximum 3 (Three) DIN can be applied through the SPICE form.

If the applicant wants to incorporation a Company with more than 3 Directors and more than 3 persons doesn’t have DIN. In such a situation applicant have to incorporate Company with 3 Directors and has to appoint new directors later on after incorporation.

No need to file any separate form. Details in relation to Area Code and other details shall be mention in the form INC-32 itself and PAN & TAN shall be generating with Certificate of Incorporation.

Yes, approval of name is mandatory, to get the name approved from the ROC, one needs to submit the RUN (Reserve Unique Name) form which is in the e-format. Various items are to be filled in while submitting the RUN form.  Also, the name which is approved by the ROC is available for use only for twenty days in case of a new company and sixty days in case of change of name of an existing company.

In case of incorporation of a company where any of the subscribers of the MOA/AOA is signing at a place outside India, MOA & AOA shall be filled with INC 32 in the respective format as specified in Table A to J in Schedule I without filing form INC 33 and INC 34. (Means Physical attachment of MOA & AOA in e-form INC 32