Conversion into LLP

LLP, Limited Liability Partnership, llp act and procedure in India

Step 1: Deciding the Partners and Designated Partners
Private Company desires to convert its status to LLP Form shall foremost decide the designated Partners of the proposed LLP, as only the members can be the Partners of the converted LLP and of these members of the
company at least two Partners would be the Designated Partners. In case of Body Corporate who was the member of the Company, desires to act as designated partner of LLP, in that case their nominee can be appointed as the designated Partners.
Parameters for deciding Designated Partners:
  1. Minimum of Two Individuals as Designated Partners, of total no. of Partners.
  2. Atleast One Designated Partner to be Resident Indian.
In case of conversion of Private Limited Company into LLP, all the shareholders of the Company to be partners in the LLP and no one else and also there will be no security interest subsisting or in force at the time of application in the assets of the Company.

Step II: Obtaining DPIN(now called DIN) and Digital Signature:
Section 7 (6) of LLP Act 2008, provides that every Designated Partner to obtain a DPIN (now called DIN) from the Central Government.
Every Designated Partner requires Digital Signature for being registered as Business user. The signatures shall also be required for signing and filing of all relevant forms and documents to be filed, annually or event based after incorporation of the LLP, asking for approvals or as intimation.

Step III: Checking the Name Availability for LLP
The next step is to make an application in eForm 1 of Rule 18(5) of the Limited Liability Partnership Act 2008, for reservation of the desired name of the LLP on payment of the prescribed fees.
A Board resolution passed by the Company approving the conversion into LLP shall be attached with the aforesaid form.

Step IV: Filing of Incorporation Document
After the name is approved, Incorporation documents (e Form 2) along with Registered Office Proof need to be filed. Also, the consent of Partners (e Form 4) and declaration electronically through the medium of e-forms prescribed with the Registrar of Companies for incorporation of the LLP on payment of prescribed fees based on the total monetary value of contribution of partners in the proposed LLP.

Step V: Drafting of LLP Agreement
The next pertinent step is drafting of Limited Liability Partnership Agreement governing the mutual rights and duties among the partners and among the LLP and its partners containing the basic content in respect of Name of LLP, Name of Partners & Designated Partners , Form of contribution , Profit Sharing ratio , Rights & Duties of Partners , Proposed Business , Rules for governing the LLP.
In case no agreement is entered into, the rights & duties as prescribed under Schedule I to the LLP Act shall be applicable. After the LLP Agreement is executed, e Form 3 is filed by paying the prescribed fees to the registrar.

Key points on:
  • Filling will be done on www.llp.gov.in
  • Designated Partner who would be signing all the forms need to register as business user.
  • Association of Digital Signature (DSC) is necessary for registering as Business user.
  • LLP portal does not accept DSC from token at time of registration as business user, you need to export the public key of the DSC on the system and register the same. To know more, check out the Digital Signatures under FAQ’s.

Step VI: Filing of Conversion Application
Application for conversion in eForm 18 to be submitted by the Shareholder of the Company covering name, registration number and date of Incorporation of the Company, consent of all shareholders of the Company along with specified details regarding security interest in the assets of the Company, prosecution by or against the Company,  Income Tax returns and other specified details.

Step VI: Certificate of Registration
On all formalities and filings been complied with by the applicants and approved by the Ministry, Registrar of Companies to issue a Certificate of Registration as to formation of the LLP. The Certificate of Registration issued shall be the conclusive evidence of conversion of the LLP.
In the event, Registrar has refused the registration, the applicant company, may apply to the Tribunal within sixty days from the date of receipt of such intimation of refusal.

Step VI: Information to Registrar of Companies.
Converted Limited liability partnership to file within fifteen days of the date of registration, information to the concerned Registrar of Companies with which it was registered under the provisions of the Companies Act, 1956 (1 of 1956) about the conversion and of the particulars of the limited liability partnership in  eForm 14 within 15 days of conversion into LLP.

To know more about Conversion and LLP in India log into www.llponline.in
Or contact:
Mr. Manoj Kumar
Vice President
Corporate Professionals
+911140622228, +919910688433,
Email:-manoj@indiacp.com

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