Convert Private Limited Company to LLP

Convert to more simple business structure leaving behind complex business compliances

Conversion of a private company to LLP

LLP structure offers the benefits of both – a partnership and a company. Therefore, by converting the company to LLP, the business gains more operational flexibility. The characteristics of being a separate legal entity and limited liability remain the same. Further, the operations and management come directly in hands of the LLP partner(s) unlike in Private Company where it is with the director(s).

LLP is governed by the LLP Agreement executed by the Partners. It has lesser compliance requirements and it is easier to operate. It preserves the benefits of a partnership with providing security and credibility to a company. The conversion of Private limited to LLP must be followed by the approval of the Ministry by the online application providing necessary documents.

Benefits of converting Pvt. Ltd Company to LLP

Less Statutory Compliance
The compliances to be fulfilled are less as compared to a Private Limited Company. An LLP is not required to maintain statutory records & registers. The requirement of a statutory audit is also relaxed in case of LLP.
Operational Flexibility
The partners are directly associated with the day-to-day operations and management of LLP. Unlike a company, LLP is governed through the LLP Agreement which is executed mutually by the partners.
Rewards and returns to partners
The partners of the LLP receives multiple returns, such as remuneration, the share of profit and also the interest on capital. The remuneration is paid for active participation by partners, whereas the share of profit is part of profit generated from business activities.
Independent liability
No partner is liable on account of the unauthorized actions of other partners. Thus, individual partners are shielded from the burden of joint liability created by another partner’s wrongful business decisions or misconduct.

Documents required to convert Private limited company to LLP

Consent of all the directors and shareholders of the company for conversion in the given format
Clearance from tax authorities
NoC from the tax authorities is required to be obtained
Creditors approval
List of all the secured creditors along with their consent
Financial Statements
The financial statement of the previous year to be provided aling with ITR filed
Digital signature
DSC of all existing directors
Pvt.Ltd. company documents
PAN card, certificate of incorporation, GST registration or any other applicable documents/registrations.

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Covert Private Limited company into LLP in 3 Easy Steps

  • Spare less than 10 minutes to fill in our Questionnaire
  • Provide basic details & documents required for registration
  • Make payment through secured payment gateways
  • Assigned Relationship Manager
  • Procurement of Digital Signatures (DSC)
  • Application for Name Reservation
  • Documents drafting including LLP Agreement
  • Certificate of Incorporation
  • Application for change in PAN & TAN
  • Payment of Stamp Duty on LLP Agreement

All it takes is 20-25 working days*

*Subject to Government Processing Time

Process of conversion into LLP

  • Consultancy and assistance for conversion
  • Collection of basic information & documents
  • Application for Name Reservation for LLP
  • Drafting of necessary resolutions for company
  • Drafting of incorporation documents
  • Filing LLP form 17 application for conversion into LLP
  • Online filing of LLP form 2
  • Government processing time to approve the application
  • Application for change in PAN and TAN
  • Drafting of LLP Agreement
  • Payment of Stamp Duty
  • Filing of LLP Agreement with MCA
  • Government processing time
Explore conversion of private company to LLP

Frequently Asked Questions

What is the difference between LLP and a company?
A basic difference between the LLP and a company lays in the internal governance structure. The LLP has more flexibility and less compliance requirements compared to a Company.
What are the annual compliance requirements for LLP?
LLPs are required to file an annual filing with the Registrar each year. However, if the LLP has a turnover of fewer than ₹40 Lakhs and/or has a capital contribution of fewer than ₹25 Lakhs, the financial statements needs no auditing.
What are the requirements and consequence provided in the Act in respect to the licences, permits, approvals etc. obtained by the company prior to its conversion into LLP?
It has been provided in the Act that on conversion, any approval, permit or license issued to the Private Company under any other Act shall; subject to the provisions of such other Act under which such approval, permit or license was issued, be transferred in the name of converted entity viz. LLP. Barring some registrations like GST or which a new application needs to be filed.
Do we need to execute any instrument for transferring the assets & liabilities on conversion of company into LLP?
On conversion of the Company/partnership into LLP, all tangible (movable or immovable) and intangible property vested in the company, all assets, interests, rights, privileges, liabilities, obligations relating to the company/firm and the whole of the undertaking of the company shall be transferred to and vest in the Limited Liability Partnership without further assurance, act, or deed.
What are the basic conditions for converting Private Limited Company to LLP?
Following are the conditions for conversion:
– All the members of the Company shall become the partners of the LLP on conversion.
– No security interest in the assets of the company should be subsisting or in force on the date of conversion i.e. the assets are free of any encumbrance.
– Up-to-date Income-tax return has been filed under the Income-tax Act, 1961.
– Any clearance, approval or permission for conversion of the company into Limited Liability Partnership, if required from anybody/ authority, etc. has been obtained.
Can NRIs / Foreign Nationals be designated Partners in a LLP?
Yes, the LLP Act 2008 allows Foreign Nationals including Foreign Companies & LLPs to incorporate LLP in India, provided at least one designated partner is resident of India. However, the LLP/Partners would have to comply with all the relevant Foreign Exchange Laws/ Rules/ Regulations/ Guidelines.
Whether any capital gain is payable on conversion of Company into LLP?
In case of conversion to LLP, the decision regarding capital gain, whether applicable or not, is subject to certain conditions. Any transfer of the capital asset or intangible asset or shares held in the company by a shareholder as a result of the conversion of the company into a Limited Liability Partnership would not be subject to Capital Gain. But if there is a change in shareholding i.e. change in the profit sharing ratio and benefit arises from the conversion, then the capital gain would be payable.
What effect the conversion has on Permits or licenses issued to the Private Limited Company?
In most cases, the terms of the license become the deciding factor whether or not they can be transferred. Otherwise, fresh GST registration or FSSAI registration would have to be obtained by the promoters.
How can I get the PAN and TAN in the name of LLP?
The application of PAN and TAN in the name of LLP shall be applied after the issuance of Certificate of Incorporation of LLP. The physical copy of the PAN will be received at the Registered Office only after being dispatched by the Income Tax Department.

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Convert to more simple business structure leaving behind complex business compliances