A “Limited Liability Partnership” is a partnership formed and registered under the Limited Liability Partnership Act, 2008.
How to convert a Limited Liability Partnership into Private Limited Company?
The Limited Liability Partnership Act, 2008 is silent on conversion of LLP into Private Limited Company. The Companies Act, 2013 speaks about this.
Section 366 of the Act says that a Limited Liability Partnership can be registered. The basic requirements are as follows:-
- A Limited Liability Partnership should have seven or more members.
- A Limited Liability Partnership cannot register as an Unlimited Company or as a Company Limited by guarantee.
Registration in case of a Limited Liability Partnership cannot be held invalid by reason that it is being wound up.
- A Limited Liability Partnership should be registered with majority of members or proxies of the members who are present. The votes are to be as per the regulations of the company.
- It can be registered as a Company limited by shares when it is having a permanent paid-up or nominal share capital of fixed amount divided into shares which are of fixed amount or held and transferable as stock or divided and which are held partly. It should be formed on the principle of having for its members who are holders of those shares or that stock and no other person
The Companies (Authorized to Registered) Rules, 2014 further says about this conversion as follows: –
- A company should have the name available as per Section 4 of the Act.
- It should attach the required documents and information to the Registrar along with Form No.URC-1.
This form is given in the end of these Rules. This form is for the purpose of “Application by a company for registration under Section 366”.
- It further separately says the rules “For Registration as a Company Limited by shares” and “For Registration as a Company by guarantee or an Unlimited Company”
- For Registration as a Company Limited by Shares:-
- There should be a list having the Names, Addresses and Occupations of all persons who are members with the shares allotted for them. It should separately show shares allotted in cash and other than in cash. In cases where the shares are numbered it should distinguish each share by its number and which is not being more than six clear days before the day of registration were partners of Limited Liability Partnership.
- There should be a list of persons who are to be first directors of the company with their names, surnames, family names, the DIN, passport number with its expiry date, residential addresses and their interests in other firms or body corporate. It should also have their consent to act as directors of the company.
- An affidavit from persons who are to be first directors of the company that they are not disqualified from being a director under sub-section (1) of section 164. It should say that all documents with Registrar for registration of the company contain information that is correct, complete and true.
- A list of the names and addresses of Partners of Limited Liability Partnership.
- Written consent or No Objection Certificate from all the secured creditors of the applicant.
- Written consent from the majority of members or proxy of person who are present at a general meeting who are agreeing for such registration.
- A copy of Act of Parliament or any other law, Deed of Partnership, Bye laws or other instrument instituting or constituting a company which is verified under sub-rule (4).
- It should also specify the nominal share capital of the company and number of shares into which it is divided, the number of shares taken and amount paid on each share and the name of company with words “Limited” or “Private Limited”.
- For registration as a company limited by Guarantee
- All the points from (1) to (7) as above would apply to such a company as well.
- There should be a resolution declaring the amount guarantee.
- An affidavit should also be there from all the members or partners duly notarized that all necessary documents or papers will be submitted to registering or other authority with which it was already registered for its dissolution as Limited Liability Partnership.
- A list of members, directors and other particulars to the company should be given to Registrar verified by two or more proposed directors or two or more proposed partners of Limited Liability Partnership.
- The Company should publish an advertisement seeking suggestions for registration and Form No.URC-2 would be published in an English and vernacular newspaper where the Limited Liability Partnership is present.
- A copy of notice which is given to Registrar (LLP) along with proof of service should be attached to Form No.URC-1.
- The Registrar would verify everything and depending on that would give certificate of registration under Form No.INC.11.
- Limited Liability Partnership which is registered should give intimation to Registrar (LLP) within 15 days on which it was registered or already registered that it is going in for dissolution as a Limited Liability Partnership.
- If any proceedings are pending against Limited Liability Partnership, a statement of such proceedings should be attached to Form No.URC-1.
- A Limited Liability Partnership which is registered and being converted into a company should file a declaration with Registrar (LLP) and should be attached to Form No.URC-1.
- A notice of objections should be served within 21 days.
- A statement of accounts which is prepared not preceding 15 days before registration certified with Auditor and Audit Financial Statement of previous year should be attached to Form No.URC-1.If the assets of the company are revalued of past three years, the surplus profit would not be credited to Capital Account or Current account of Partners.
Sources- 1.The Companies Act, 2013
- Limited Liability Partnership Act, 2008
- The Company (Authorized to Register Rules), 2014
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