🔹 LEGAL BASIS FOR CONVERSION

(LLP TO PVT LTD)

Conversion of LLP into Private Limited Company is governed by:

Section 366 of Companies Act, 2013

Companies (Authorized to Register) Rules, 2014

Rule 3 to Rule 6

Schedule I – Table A & F

LLP Act, 2008 (for consent & winding up declarations)

🔹 ELIGIBILITY CONDITIONS

✔ LLP must have minimum 2 partners

✔ All partners must become shareholders

✔ No subsisting security interest on assets

✔ Consent of all partners

✔ LLP agreement permits conversion (if not, amend first)

🔹 STEP–BY–STEP PROCEDURE (PRACTICAL)

STEP 1: PARTNER’S CONSENT & PRELIMINARY ACTION

Obtain written consent of all partners

Obtain NOC from creditors (if any)

Prepare:

Statement of Assets & Liabilities (not older than 30 days)

List of partners

List of secured creditors (if NIL, declaration)

STEP 2: APPLY FOR NAME RESERVATION

📌 Form: RUN (Reserve Unique Name)

📌 Select category: Conversion of LLP into Company

Attach:

LLP incorporation certificate

Name significance

Proposed objects

🔹 STEP 3: BOARD / PARTNERS RESOLUTION (LLP)

📄 RESOLUTION OF PARTNERS – APPROVAL FOR CONVERSION

“RESOLVED THAT pursuant to Section 366 of the Companies Act, 2013 and other applicable provisions, consent of the partners be and is hereby accorded to convert the LLP into a Private Limited Company in the name of __________________ Private Limited.

RESOLVED FURTHER THAT Mr. ____________, Designated Partner be and is hereby authorized to sign, execute and submit all documents, forms and returns with ROC and other authorities and to do all such acts as may be required for conversion.”

🔹 STEP 4: PREPARE MOA & AOA (IMPORTANT)

📄 MAIN OBJECT CLAUSE – MOA (GENERAL TRADING SAMPLE)

To carry on the business of import, export, wholesale, retail, trading, distribution, dealing, stocking, marketing of electronics items, electrical goods, machinery, equipment, consumer goods, industrial goods, commodities and all kinds of movable and immovable goods whether manufactured by the Company or others, in India or abroad.

📄 CONVERSION CLAUSE – MOA

The Company is incorporated pursuant to Part I of Chapter XXI of the Companies Act, 2013 as a company limited by shares and the whole of the undertaking, assets and liabilities of the erstwhile __________ LLP are vested in the Company.

📄 AOA – CONVERSION & SHARE ISSUE CLAUSE

All partners of the LLP immediately before conversion shall become shareholders of the Company in the same proportion as their capital contribution in the LLP.

No consideration other than allotment of shares shall be paid.

🔹 STEP 5: FILE FORM URC–1 (MOST CRITICAL FORM)

📌 Attachments to URC-1

List of partners & shareholders

Consent of partners

Statement of Assets & Liabilities

LLP Agreement

MOA & AOA

Declaration of no security interest

Affidavit by partners

NOC from creditors (if any)

🔹 STEP 6: PUBLIC NOTICE (RULE 4)

📄 NEWSPAPER NOTICE DRAFT

Notice is hereby given that __________ LLP proposes to register itself as a Private Limited Company under Section 366 of the Companies Act, 2013. Any person having objection may intimate ROC within 21 days.

Publish in:

1 English newspaper

1 Vernacular newspaper

🔹 STEP 7: ROC VERIFICATION & INCORPORATION

ROC may:

Ask for clarification

Issue approval

Grant Certificate of Incorporation

🔹 STEP 8: FIRST BOARD MEETING (COMPANY)

📄 NOTICE OF FIRST BOARD MEETING

Notice is hereby given that the First Board Meeting of the Company will be held on ______ at ______ to consider appointment of first directors, adoption of MOA & AOA, issue of shares and statutory registrations.

📄 FIRST BOARD MEETING RESOLUTION

RESOLVED THAT the Certificate of Incorporation issued by ROC be noted.

RESOLVED FURTHER THAT shares be issued to the subscribers as per conversion ratio.

RESOLVED FURTHER THAT statutory registers be opened and maintained.

🔹 STEP 9: ISSUE SHARE CERTIFICATES

Within 60 days

Stamp duty as per State Act

🔹 STEP 10: POST-CONVERSION COMPLIANCES

✔ PAN / TAN update

✔ GST amendment

✔ Bank account conversion

✔ Intimation to all authorities

✔ Close LLP compliances

🔹 KEY TAX & GST ADVISORY

✔ No Capital Gains if:

All partners become shareholders

Same profit sharing ratio

No consideration except shares

(Section 47(xiiib))

✔ GST registration must be amended, not cancelled

🔹 PRACTICAL CA TIPS

🔹 Avoid mismatch in capital vs shareholding

🔹 Assets valuation must tally

🔹 URC-1 scrutiny is strict

🔹 Use clean affidavit language

📂 DOCUMENT SET – LLP TO PRIVATE LIMITED CONVERSION

🔹 1️⃣ AFFIDAVIT BY PARTNERS

(On ₹100 Stamp Paper – Each Partner)

AFFIDAVIT

I, Mr./Ms. ____________________, aged ___ years, residing at ____________________, Partner of __________________ LLP, do hereby solemnly affirm and declare as under:

That I am a Partner of __________________ LLP, incorporated under the LLP Act, 2008.

That the LLP proposes to convert into a Private Limited Company under Section 366 of the Companies Act, 2013.

That all partners of the LLP shall become shareholders of the Company in the same proportion as their capital contribution in the LLP.

That no consideration other than allotment of shares shall be paid to the partners.

That the LLP has no secured creditors OR all secured creditors have given their consent for conversion.

That all assets and liabilities of the LLP shall vest in the Company upon conversion.

That the contents of this affidavit are true and correct.

DEPONENT

VERIFICATION

Verified at ___________ on this ___ day of ______ 20__ that the contents above are true.

DEPONENT

🔹 2️⃣ DECLARATION – NO SECURITY INTEREST

(Mandatory Attachment for URC-1)

DECLARATION

We, the Partners of __________________ LLP, hereby declare that:

• There is no subsisting security interest on the assets of the LLP

OR

• All secured creditors have provided No Objection Certificate for conversion.

We further declare that the LLP is eligible for registration under Section 366 of the Companies Act, 2013.

For __________________ LLP

Partner / Designated Partner

Name & Signature

🔹 3️⃣ CREDITORS CONSENT LETTER (IF ANY)

CONSENT LETTER

To

__________________ LLP

We hereby give our consent for conversion of __________________ LLP into a Private Limited Company under Section 366 of the Companies Act, 2013.

Name of Creditor: __________

Outstanding Amount: ₹__________

Authorized Signatory

Date:

🔹 4️⃣ URC-1 ATTACHMENT CHECKLIST (EXCEL FORMAT)

You may copy this into Excel:

Sr

Document Name

Mandatory

Remarks

1

LLP Incorporation Certificate

Yes

PDF

2

LLP Agreement

Yes

Signed

3

Partners Consent Resolution

Yes

Signed

4

List of Partners & Shareholding

Yes

As on date

5

Statement of Assets & Liabilities

Yes

CA Certified

6

Affidavit by Partners

Yes

Stamp Paper

7

Declaration – No Security Interest

Yes

Signed

8

Creditors NOC

If Applicable

PDF

9

MOA (Draft)

Yes

Proper clauses

10

AOA (Draft)

Yes

Conversion clause

11

Newspaper Advertisement

Yes

English + Vernacular

🔹 5️⃣ SHAREHOLDING CALCULATION FORMAT

Partner Name

LLP Capital (₹)

% Holding

Shares Allotted

A

5,00,000

50%

50,000

B

5,00,000

50%

50,000

Total

10,00,000

100%

1,00,000

📌 Face Value: ₹10 per share

📌 Authorised Capital must be ≥ LLP Capital

🔹 6️⃣ SPECIAL RESOLUTION – CONVERSION (COMPANY)

SPECIAL RESOLUTION

“RESOLVED THAT pursuant to Section 366 and other applicable provisions of the Companies Act, 2013, approval of members be and is hereby accorded for conversion of __________________ LLP into __________________ Private Limited.

RESOLVED FURTHER THAT all assets, liabilities, rights and obligations of the LLP shall vest in the Company.

RESOLVED FURTHER THAT the Board be authorized to file necessary forms with ROC.”

🔹 7️⃣ MINUTES OF GENERAL MEETING

MINUTES OF EXTRA-ORDINARY GENERAL MEETING

The Chairman informed the members about conversion of LLP into a Private Limited Company.

After discussion, the Special Resolution was passed unanimously.

The meeting concluded with a vote of thanks.

Chairman

🔹 8️⃣ FIRST BOARD MEETING – POST CONVERSION

RESOLVED THAT the Certificate of Incorporation pursuant to conversion be noted.

RESOLVED FURTHER THAT shares be issued to the subscribers as per conversion ratio.

RESOLVED FURTHER THAT statutory registers be opened and maintained.

RESOLVED FURTHER THAT PAN, TAN, GST and Bank accounts be updated.

🔹 9️⃣ PRACTICAL ROC SCRUTINY TIPS (VERY IMPORTANT)

✔ Assets & capital must match exactly

✔ No rounding difference allowed

✔ LLP & Company object clause must align

✔ Newspaper date must be before approval

✔ URC-1 attachments should be merged clean PDF

🔹 1️⃣0️⃣ TAX & GST ADVISORY (FOR CLIENT NOTE)

✔ No Capital Gains u/s 47(xiiib)

✔ Carry forward of losses allowed

✔ GST amendment (NOT cancellation)

✔ Bank accounts converted, not closed