Private Limited to LLP

Conversion of Private Limited Company to LLP

Converting a Private Limited Company to an LLP is the strategic choice for businesses that want to reduce compliance costs, operate with greater flexibility, and enjoy better tax efficiency. The conversion is governed by Section 56 of the LLP Act, 2008.

Advantages of Converting to LLP

• Lower annual compliance costs — no AGM, board meetings, or MGT-7 filing.
• No Dividend Distribution Tax — profits distributed directly to partners.
• More flexibility in profit-sharing and management arrangements.
• No mandatory statutory audit if turnover is below ₹40 lakhs.
• No stamp duty on asset transfer during conversion.
• Tax-neutral conversion — no capital gains tax triggered on assets transferred.

Conditions for Conversion

• All shareholders of the company must become partners of the LLP.
• No pending litigation or legal proceedings against the company.
• Company must not have any unpaid income tax or outstanding demands.
• Consent of all shareholders required.

Documents Required

• Certificate of Incorporation of the existing Private Limited Company.
• MoA and AoA of the company.
• Latest audited financial statements.
• NOC from all secured creditors.
• Consent of all shareholders in writing.
• Proposed LLP Agreement.

Conversion Process

1. Pass a board resolution and shareholder resolution approving the conversion.
2. File Form 18 (Conversion Application) and Form 2 (FiLLiP) on MCA portal.
3. Submit all required documents and obtain MCA approval.
4. Receive Certificate of Incorporation of the LLP.
5. Cancel company registration and update all business records.

Timeline

Approximately 20–30 working days.

Why Choose Tax Precision?

• Expert analysis of whether conversion is beneficial for your business.
• Complete Form 18 and FiLLiP filing management.
• LLP Agreement drafting tailored to your business structure.
• Post-conversion PAN, GST, and bank account update support.
• Annual LLP compliance management post-conversion.