Avoid limiting your business growth due to limited fund raising, now get your LLP converted into unlisted public company and enables them to scale their operations in an easier way.
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A statement certifying various following details:-
Unlisted Public Companies can easily raise huge capital within the domestic Country as well as globally by listing themselves in Stock exchanges.
Unlisted Public Companies are capable of attracting more brand identity.
Limited liability concept of company shall remains, even after conversion from LLP to a Unlisted Public Limited Company.
Unlisted Public Companies are eligible for free transfer of its shares subject to the provisions of Companies Act and SEBI Act.
Unlisted Public Companies unlike LLP are not restricted to accept deposits from public, they can accept public deposits easily subject to the provisions of Section 76 of Companies Act 2013 and the rules.
Collection of documents of proposed directors and documents of LLP, along with consent of Directors, Members and creditors, if any. Approval of authorities if required.
Filing of application form for the approval of name of the on the MCA.
Preparation and filing of form for application of conversion of LLP into unlisted public company.
After successful submission of application forms for conversion. SRN will be generated. This SRN can be used for tracking the status of application.
After successful approval of the form for conversion form ROC, conversion certificate will be generated.
The entire world is moderately gathering towards the global trade which is free from any trade restriction i.e globalization between the countries for growth in their business or for impart equity capital. Thus, conversion of Limited Liability Partnership into a company may be feasible for the existing establishments to rearrange from one manner of business to another.
The option of various emerging entrepreneurs working as small businesses who have Limited Liability Partnership(LLP) registration earlier, are now wanting to convert their Limited Liability Partnership (LLP) into a private limited company for development in their business or for introducing equity capital.
Documents required are-
A statement certifying various following details:-
No amount shall be paid, either directly or indirectly, for a period of 3 years from the date of conversion to any partner from the balance of accumulated profit showing in the accounts of the company as on the date of conversion.
At the time of conversion of limited liability partnership if Limited Liability Partnership (LLP) partner is a body corporate, a natural person shall be appointed as its nominee.
At the time of conversion of limited liability partnership (LLP) into private limited company or public limited company a existing (DPIN) designated partner identification number has been integrated with (DIN) director identification number after approval verification from ROC.
Enrollment of DSC (Digital Signature Certificate) for one of the Designated Partners is mandatory. MCA is authorised to issue director identification number (DIN) for the existing Designated Partners of Limited Liability Partnership (LLP).
Yes, Acknowledgement Copy of latest income tax return is mandatorily required on conversion of limited liability partnership(LLP) into private/public limited company.
Yes, a statement containing the details of below mentioned points are required:-
Yes, LLP can apply for same name by applying for name availability in RUN by adding Private Limited or Limited in the last of the name.
For the purpose of conversion more than 50% that is majority of partners of the LLP is required.
This is not a universal rule though, one should prefer LLP when the capital contribution is less than Rs.25 lacs and annual turnover is less than Rs. 40 lacs.
BASIS OF DIFFERENCE | PRIVATE LIMITED COMPANY | ONE PERSON COMPANY | LLP | PARTNERSHIP FIRM | PROPRIETORSHIP CONCERN |
|---|---|---|---|---|---|
| Meaning | Private Limited Company Private company means a company which is formed by coming together of people for a profit motive. |
One Person Company One Person Company (OPC) means a company which is formed with only single person as a member. |
LLP LLP is a body corporate which is hybrid of partnership firm and company. |
Partnership Firm A partnership firm is not a separate legal entity distinct from its partners. It is merely a collective name given to the individuals composing it. |
Proprietorship Firm Proprietorship is a type of business that is owned, managed, and controlled by one person – who is the proprietor. |
| Prevailing laws | Companies Act Companies are governed by ‘Companies Act, 2013’& rules made under. |
Companies Act Companies are governed by ‘Companies Act, 2013’ & rules made under. |
LLP Act
Limited Liability Partnership are prevailed by ‘The Limited Liability Partnership Act, 2008’ and various Rules made there under.
|
Partnership Act
Partnership is prevailed by ‘The Indian Partnership Act, 1932’ and various Rules made there under.
|
NA |
| Charter Documents | MOA & AOA Memorandum and Article of Association is the charter of the company which provides its main object clauses & scope of operation. |
MOA & AOA Memorandum and Article of Association is the charter of the company that defines its scope of operation. |
LLP Agreement LLP Agreement is a charter document of the LLP which denotes its scope of operation and rights and duties of the partners vis-à-vis LLP. |
Partnership Deed Partnership Deed is a charter document of the firm which denotes its scope of operation and rights and duties of the partners. |
MSME (Udhyam Aadhar) Udyog Aadhar (MSME) is certificate which signifies that the entity is micro, small or medium enterprise. |
| Limit of Members | 2-200 It must have at least 2 and maximum 200 members. |
1 OPC is manages by one person only hence it requires only single person. |
2-Unlimited There is no maximum limit on number of partners but must have at least two individuals as Designated Partners. |
2-20 At least 2 partners are required for it and which can’t exceed 20 partners. |
1 Single owner i.e. proprietor required for Proprietorship firm. |
| Directors /Designated Partners | 2-15 It requires At least 2 Director and maximum 15 and further can be increased by special resolution. |
1-15 It required At least 1 Director and maximum 15 and further can be increased by special resolution. |
2-Unlimited Minimum 2 designated partners and there is no maximum limit for LLP. |
NA |
NA |
| Separate legal identity | Yes Company has separate legal identity from its subscribers of MOA. |
Yes Being single owner still have separate legal identity from the company. |
Yes LLP has separate legal identity from its partners and designated partners. |
No Partners and the partnership firm are treated as single identity. |
No Proprietor and proprietorship concern have same legal identity. |
| Limited Liability | Yes The liability of Members are limited up to the amount of share capital which is subscribed by them. |
Yes The sole Member of the company is liable only up to the amount of capital introduced by him. |
Yes Designated Partners and Partner’s liability is restricted to the amount of capital contribution as mutually decided at the point of Agreement. |
No Partners are jointly and severally liable for any liability of the firm as their liability is unlimited. |
No Single owner has unlimited liability for any losses or debt in the proprietorship concern. |
| Perpetual Life of the entity | Yes Entity’s life is not based on the shareholder’s life. It continues by changing of the owner’s share. |
Yes In case of death of the shareholder the company is run by the nominee of the company. |
Yes On death of partner or designated partner, Share of them will be transferred to their legal heir but this may not result in dissolution. |
No It does not have perpetual succession as this depends upon the will of partners. |
No Perpetual existence does not exist with the death of the proprietor concern. |
| Annual Statutory Compliance | High Annual Filling of Company, Directors compliance, Audit, Income tax Return, Meeting and other Filling GST compliances. |
High Annual Filling of Company, Directors compliance, Audit, Income tax Return, Meeting and other Filling GST compliances. |
Low Annual Filling, Income tax Return, GST compliance is to be required and Audit is not mandatory. |
Low Income tax Return and GST compliance Audit in case of Turnover crosses the limit. |
Lowest Compliance with Income tax and GST only(if any). |
| Transferability | Yes Shares are easily transferable from one to other. |
Yes Share can be transferred by one person to other but nominee needs to be changed. |
Yes Addition and deletion of partners are possible through change in share of capital contribution. |
Yes Addition and removal of partner is possible new deeds with the changes in capital and profit sharing needs to be done. |
No It cannot be transferred. |
| Foreign Direct Investment (FDI) | Yes FDI is available under automatic route. |
No Single owner hence FDI is not possible and not allowed. |
Yes FDI is permitted subject to prior approval by the central government. |
No FDI is not permitted in partnership firm. |
No Small scale Business organization hence no FDI is permitted. |
