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In India, a Limited Liability Partnership (LLP) is a popular business structure that offers the advantages of both a partnership and a company. However, as a business grows and expands, the need for more capital and scalability arises. In such cases, converting an LLP into a Private Limited Company (PLC) is a popular choice. In this article, we will discuss the process of converting an LLP into a PLC in India and the services offered by SV Associates to assist with the conversion.
The process of converting an LLP into a PLC in India is governed by the Companies Act, 2013, and the Limited Liability Partnership Act, 2008. The process involves the following steps:
Board Meeting: The first step is to convene a meeting of the Board of Directors of the LLP and pass a resolution for the conversion of the LLP into a PLC. The Board should also authorise a designated partner to initiate the conversion process.
Apply for Name Approval: The next step is to apply for the availability of the proposed name of the company with the Registrar of Companies (RoC). The proposed name of the PLC must not be identical or similar to any other company or LLP name already registered with the RoC.
File Conversion Application: Once the name is approved, the designated partner should file an application with the RoC for the conversion of the LLP into a PLC. The application should be accompanied by the following documents: 1. Statement of Accounts of the LLP 2. List of all the partners and their consent to become shareholders in the PLC 3. NOC from all the creditors of the LLP 3. NOC from the Income Tax Authority
Publication of Notice: After filing the conversion application, a notice of the proposed conversion must be published in two newspapers (one in English and one in the regional language) circulating in the district where the registered office of the LLP is situated.
Issuance of Certificate of Incorporation: If the RoC is satisfied with the documents and notices, it will issue a Certificate of Incorporation to the newly converted PLC.
The process of converting an LLP into a PLC in India can be time-consuming and complicated. This is where we step-in to assist with the conversion process. SV Associates offer a range of services, including:
Name Availability Check: The first step in the conversion process is to check the availability of the proposed name for the PLC. SV Associates assist with this process and provide guidance on the best name for the new company.
Preparation of Documents: The conversion process requires several documents, including the Statement of Accounts, List of Partners, NOCs from Creditors and Income Tax Authority, and the Conversion Application itself. Our team can assist with the preparation of these documents and ensure that they are in compliance with the regulations.
Legal Compliance: Our team can also ensure that the conversion process is in compliance with all legal and regulatory requirements. They can also provide guidance on the changes that need to be made to the LLP's internal agreements and other legal documents.
Publication of Notice: One of the requirements for converting an LLP into a PLC is the publication of a notice in two newspapers. Our experts can take care of this requirement and ensure that the notice is published in the right newspapers.
Liaising with the Registrar of Companies: SV Associates can also liaise with the RoC on behalf of the LLP and ensure that all required documents and information are provided. This can help speed up the conversion process and ensure that there are no delays.
Post-Conversion Compliance: Once the conversion process is complete, the new PLC must comply with several legal and regulatory requirements, including filing of annual returns and other statutory forms. Our team also assists with these compliance requirements and ensures that the new PLC remains in good standing with the authorities.
More Credibility: A PLC is seen as more credible than an LLP, especially by larger investors, financial institutions, and customers.
Access to Capital: PLCs can raise capital from the public through the issuance of shares, which is not possible in an LLP.
Tax Benefits: PLCs are eligible for certain tax benefits that are not available to LLPs.
Limited Liability: PLCs offer limited liability protection to their shareholders, which can be beneficial in case of lawsuits or other legal issues.
Cost savings: LLP To Private Limited Conversion to us can be cost-effective as labour and infrastructure costs are lower compared to other firms.
Access to skilled professionals: SV Associates has a pool of qualified and experienced who can provide high-quality LLP To Private Limited Conversion Services.
Time savings: LLP To Private Limited Conversion to us can save time for the company as our team of professionals can handle the LLP To Private Limited Conversion process efficiently and effectively.
Risk management: LLP To Private Limited Conversion to us can help companies manage LLP To Private Limited Conversion risks by providing an independent and objective perspective on their financial statements.
Here are some frequently asked questions regarding converting an LLP into a Private Limited Company in India:
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