How to Convert an LLP in a Private Limited Company?
Many business structures registered as a limited liability partnership try converting their business into a certified Private Limited Company owing to a varied set of reasons. Those reasons may include wanting to involve shareholders in the business as LLP doesn’t allocate the concept, expansion of business, seeking equity investors, and raising equity capital. Reasons may vary for different business models. Moreover, if your LLP business crosses 40 lakhs INR as the annual profit, conversion to a PLC is definitely a wiser choice in terms of expansion and growth. The process of conversion takes place digitally.
Follow these steps to know how you can convert your Limited Liability Partnership into a Private Limited Company:
- Choose a unique name for your company, which hasn’t been registered by any other company. Fill out the Reserve Unique Name (RUN) form and submit it for approval by the Registrar of Companies (ROC). It is important to make sure that you fill out the form in an E-format.
- The next step after getting the name of your company approved, is to submit a request for Digital Signature Certificate. The form for it needs to be filled by the mutually proposed director of the company amongst the shareholders and other directors.
- Thirdly, you need a Digital Identification Number (DIN) which again needs to be obtained by the Director of the company. For the record, DIN is a unique figure which identifies the director of the company. The director should fill the form requesting a DIN only after attaching identity and address proof with the application.
- Afterwards, the URC-1 form needs to be filled by the director of the company. Let’s discuss this step in detail. Not just the applicant, but every shareholder and directly associated with the company needs to provide proof of their identity and address. Proof of identity can be provided by Aadhar card/Pan card/Passport/Driving license. Proof of address can be provided by recent bank statement and latest electricity bill. You also require your DIN while filling the form and make sure that all your documents are verified and up to date. Along with these documents, the first directors of the PLC need to sign an affidavit claiming that they have not been banned to be the directors of the company.
- During the conversion, you also need to establish yourself as being an LLP earlier, for which you need to submit your LLP agreement constituting the complete list of your partners along with their verified addresses.
- Having done that, you need to provide a statement with complete information and details of the nominal share capital of the firm and the breakup of each share (share separated, shares taken, and revoked for each share).
- If you have any loans or credits against your name or company, you also need to submit a Nonobjection Certificate by all your creditors on record.
- The last step is to compile a Memorandum of Associations (MOA) and Articles of Association (AOA). On completion, submit it to the Registrar of Companies.
If you are looking for professional assistance in setting up a company in India or seeking services related to the same, we are here for you! Contact us to know more about open company in India.