An LLP can convert into a private limited company by registering under Part I of Chapter XXI of the Companies Act, 2013. All partners must consent, creditors should be notified, and the application is filed with the ROC with the required forms, MoA and AoA. The LLP's assets and liabilities vest in the company, which then issues shares to former partners.
Why convert
- Raise equity investment from angels and VCs
- Issue ESOPs to employees
- Improve credibility for large contracts and bank finance
Process
- Resolution and consent of all partners.
- Obtain creditors' NOCs and publish notice as required.
- Reserve the company name.
- File the conversion application with MoA, AoA and statements.
- Receive the certificate of incorporation.
- Close LLP-specific registrations and update others.
Tax considerations
Conversion can be tax-neutral if the conditions of the Income Tax Act are met, such as continuity of partner shareholding and no consideration other than shares. Plan the structure with advice.
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Get expert help →After conversion
- Update PAN, GST, bank accounts and licences
- Issue share certificates
- Adopt company compliance calendar
Frequently asked questions
How long does LLP to company conversion take?
It usually takes a few weeks to a few months depending on document preparation, creditor consents and ROC review.
Will the business need new licences?
Many registrations need updating to the new entity name, and some may need fresh applications. Review each licence before conversion.
Are contracts of the LLP still valid?
On conversion, assets, liabilities and contracts vest in the company by operation of law, though counterparties should be informed.
Is stamp duty payable on conversion?
Stamp duty treatment depends on state law and how assets are transferred. Check with an advisor before converting.
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