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Can a Partnership Be Converted to an LLP ? - An Overview

In comparison to a standard partnership, a limited liability partnership (LLP) can be shown to be a far better business structure. Personal liabilities have an impact on partnerships, and LLPs do away with the Indian Partnership Act of 1932’s overbearing requirements. In addition, there are tax advantages, no audit obligations below a specific capital threshold, no partner cap, and no capital contribution restrictions. Read through to know more about conversion of firm into LLP.

Conditions for Conversion of Partnership Firm into an LLP

According to Section 55 of the Limited Liability Partnership Act of 2008 read with Schedule II of the Act, a partnership can partnership be converted into llp.
There cannot be any new partners or for existing partners to stop being partners during the application process since all partners of the firm must be partners of the LLP.
Before submitting such an application, at least two partners must have DPINs and all Partners must possess a current Digital Signature Certificate (DSC).
The Partnership Act of 1932 requires that the partnership entity being converted be registered.
The approval of all partners is required.
The partners of the LLP must be the same as those of the partnership firm.
After the conversion is finished, any partner who wants to leave the LLP can do so.
All Designated Partners must receive a Director Identification Number (DIN) or Designated Partner Identification Number (DPIN).

Key Differences Between a Partnership and an LLP

Basis	Partnership	LLP
Separate Legal Entity	No.	Yes.
Liability	Unlimited. Personal assets of the partners are also liable.	Limited to the extent of their capital contribution.
Books of Accounts	Not mandatory.	Should be prepared according to the provisions of the LLP Act.
Number of Members	Maximum 20. In the case of a banking business, the maximum number is 10.	No limit on the maximum number of partners.
Digital Signature Certificate (DSC)	No such requirement.	All designated partners of the LLP should have a Digital Signature which is a prerequisite for e-filing.

Procedure for Conversion of a Firm to an LLP

Here is the process to register LLP in India. CRSB provides a seamless and hassle-free process and one can check here to know the quick and detailed process to register an LLP.

Step 1: Obtain Digital Signature Certificate(DSC)
Step 2: Apply for Director Identification Number (DIN)
Step 3: Name Approval
Step 4: Incorporation of LLP
Step 5: File Limited Liability Partnership (LLP) Agreement

What is LLP Conversion Notice ?

For a duration of 12 months, commencing no later than 14 days after registration, the LLP must include the following in all official communications: a declaration of its conversion from a partnership to an LLP from the registration date and the name and registration number (if applicable) of the original firm it converted from. Failure to comply could result in penalties, with a minimum fine of ₹10,000 and a maximum of ₹1,00,000. If the violation persists, there will be an additional fine of at least ₹50 per day, up to a maximum of ₹500 per day.

LLP Form No 17

This document is an application and statement for converting a firm into an LLP.

Part A: Application – Information to be Provided:

The SRN of the Reserve Unique Number (RUN) form is already filed. If not, the intended name of the LLP.
Firm’s name and address.
Details of the firm’s registration under the Indian Partnership Act 1932 or other laws.
Date of the agreement outlining the firm’s formation.
Total number of partners in the firm.
Auto-populated the total number of partners in the LLP from the previous point.
Total capital contribution of the firm.
Consent details of all partners.
Details affirming that all LLP partners are the same as firm partners.
Income tax return details as per Income Tax Act 1961.
Pending proceedings in courts/tribunals/authorities.
Information about any prior refused conversion applications.
Disclosure of any convictions/orders/judgments in favour or against the firm.
Whether there are secured creditors, and if yes, whether their consent for conversion has been obtained.
Whether any approvals are needed for the conversion, and if obtained.

Part B: Statement – Contents of the Declaration:

Consent from partners for firm-to-LLP conversion.
Acknowledgement of joint and several liabilities for pre-conversion liabilities.
Affirmations of compliance with LLP Act 2008 and rules, partner consistency, approvals, secured creditors’ consent, and accurate information.

Attachments Required:

Certified true Statement of Assets and Liabilities by a practising Chartered Accountant.
Partners’ consent statement.
List of secured creditors and their consent.
Recent income tax return acknowledgement.
Any required approvals.
Optional attachments, if any.

The e-form must be digitally signed by a designated partner with DIN/DPIN. Certification by a practising Chartered Accountant/Company Secretary/Cost Accountant is necessary. The Registrar must be informed using Form 14.

The Registrar should be provided with:

Firm’s name.
Principal address.
Details of firm registration.
Details of the converted LLP, along with its Certificate of Incorporation.

The partner should digitally sign the form.

Documents Required for Conversion of Partnership into an LLP

The below are the following documents required for conversion of partnership to llp:

To Be Submitted By Partners

Scanned copy of PAN card or passport (Foreign Nationals & NRIs)
Scanned copy of Aadhar card / Voter’s ID/Passport/Driver’s License
Scanned copy of latest bank statement/telephone/mobile bill or electricity/gas bill
Scanned passport-sized photograph Specimen signature (blank document with signature [partners only])
Note: Any one of the partners must self-attest the first three documents. In the case of foreign nationals and NRIs, all the documents must be notarized (if currently in India or a non-Commonwealth country) or apostilled (if in a Commonwealth country).

For Registered Office

Scanned copy of the latest bank statement/telephone/mobile bill, or electricity or gas Bill
Scanned copy of the notarised rental agreement in English
Scanned copy of No-objection certificate from the property owner
Scanned copy of sale deed/property deed in English (in case of owned property)

Procedure for Conversion of Partnership Firm into an LLP

The process of converting a partnership company into a LLP preserves the adaptability and financial advantages of a partnership while giving the partners limited liability protection. You need to follow the process mention below to change a joint company into an LLP:

Obtain DSC and DIN: The designated partners of the partnership firm need to obtain a Digital Signature Certificate (DSC) and Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA)
Name Reservation: The partners must apply for a name reservation for the proposed LLP with the MCA. submit the RUN-LLP form. The name of the form should be unique and not similar to any other registered LLP company
Drafting LLP Agreement: An agreement outlining the overall functioning of the LLP should be drafted and undersigned by all the partners. It involves all the terms and conditions of the business. It is also crucial that the agreement should comply with the provisions provided under the Limited Liability Act of 2008
Filing of Form FiLLiP: The application and declaration for the conversion of partnership company into LLP is intimated to the MCA on this application
Filing of Form 3: The partners must file Form 3 with the RoC, along with the LLP agreement and other necessary documents, to complete the registration process.

Partner's Liability Before Conversion

The members of a partnership firm are jointly and severally responsible for the bills and responsibilities of the company prior to the conversion of the firm into an LLP . This means that the partners must use their own assets to pay off creditors’ claims if the partnership is unable to settle its obligations. The partners’ liability is, however, constrained to the sum they give to the capital of the LLP following the conversion.

Effect of Registration

The partnership company is assumed to have been disbanded following the registration of the LLP , and the assets and obligations of the partnership pass to the LLP
The partnership’s operations can proceed uninterruptedly under the LLP
The LLP Act’s requirements must be followed by the partners of the partnership company, who are now its named partners
The LLP is a separate legal entity and has perpetual succession, which means that the LLP continues to exist even if the partners change
The LLP is also eligible for various tax benefits available to LLPs, such as the pass-through taxation system
The LLP may be subject to all legal actions that were ongoing against the company
Any ruling or verdict, whether favourable to the company or unfavourable, may be pursued against the LLP
All current arrangements and contracts to which the company was a party shall remain in effect with the LLP as a party

Every current assignment made by the company or power granted to the company must be treated as though it had been given to the LLP.

Conversion of Private Limited to Public Limited Company

Converting a private limited company to a public limited company is a significant step towards expanding the business and increasing access to capital. A public limited company can issue shares to the public, which means it can raise funds from a large number of investors. However, this process requires compliance with various legal and regulatory requirements, such as obtaining the approval of shareholders and the Registrar of Companies (ROC), and making changes to the Memorandum and Articles of Association. It is recommended to seek professional guidance from experts to ensure a smooth and efficient conversion of private company into public company.

What is a Private Limited and Public Limited Company

Let us have a brief understanding of what is Private limited company and public limited company.

Private Limited Company

A company that is privately held for small businesses. The liability of the members of a private limited company is restricted to the number of shares respectively held by them. The shares of a private limited company can’t be traded.

Public Limited Company

A company whose shares are traded on a stock exchange and can be purchased and traded by anyone. It is also called a publicly held company.A public limited company can offer it’s shared to general public.The Company’s Act 2013 also defines a public limited company as one that has limited liability and offers company shares to the public. Anyone can acquire the stocks of such a company either through stock-market trading or via IPOs ( Initial Public Offerings).

Benefits of a Public Limited Company

Quick Share Tranfer

Shareholders of a public limited company can transfer their shares with great ease. All they need to do is file the share transfer form and hand over the share certificate to the buyer. The process of transferring a share to another business structure is very tedious.

Raise Capital

The advantage of the public limited structure is that you can leverage it to raise capital from the general public through shares. This would, however, require listing on a stock exchange. All public limited companies can issue fixed deposits, debentures, convertible debentures to the general public

Greater Credibility

Public limited companies need to disclose their audited statement of accounts, inform the regulatory bodies of any structural change, and hold annual general body meetings for all shareholders. These compliance procedures bring a great deal of credibility to the organization.

Requirements for Conversion of a Private Limited to Public Limited Company

- DSC (Digital Signature Certificate online) and DIN ( Director Identification Number ) of two directors.

- Preparation of MOA ( Memorandum of Association ) and AOA ( Articles of Association).

- PAN ( Permanent Account Number ) and TAN ( Tax Deduction and Collection Account Number) card.

- Name search, application and name reservation.

- CIN (Certificate of Incorporation).

What Are the Post Conversion Requirements?

- Applying for a fresh PAN card is necessary

- Updating business letterheads and related stationery with the company’s new name is required

- The company’s bank account details must be updated

- Notification should be provided to tax authorities and relevant parties about the conversion to a public limited company

- Promptly produce printed copies of the new MOA and AOA

Procedure for Conversion of a Pvt Ltd into Public Company

A company already enrolled in a class may change itself as a company of another class by modification of memorandum and articles of the company. An application in this regard is required to be made to the registrar. The registrar after being convinced that all steps comply with the requirements, then it shall close the former registration of the company. After registering the documents related to the conversion, the Registrar shall issue a certificate of incorporation. The transformation of a company shall not assume any debt, claim, liabilities, and obligations. Such debt, liabilities, and contracts may be enforced and executed as if there is no such exchange.

- Calling of Board Meeting: Issue notices according to the provisions of section 173(3) of the Companies Act, 2013, for converting a meeting of the Board of Directors. The main objective of this Board meeting would be:

Pass a board resolution to get in-principal permission of directors for the conversion of private company to a public company by altering the AOA(articles of association).

- To get the approval of shareholders, fix the date, time and place for holding an Extra-ordinary General meeting (EGM) , by way of Special resolution, for convert a private company into a public company.

- To approve the notice of EGM with agenda and statement to be added to the notice of General Meeting, as per section 102(1) of the Companies Act, 2013.

- To delegate the Director or Company Secretary to issue Notice of the Extra-ordinary General meeting (EGM) as recommended by the board under article 1(c) mentioned above.

- Pass Board resolution for an increase in the number of directors up to 3, if the number of directors is less than 3.

- Issue of EGM Notice: Issue Notice of the Extra-ordinary General Meeting (EGM) to all members and affiliates, directors and the auditors of the company following the requirements of Section 101 of the Companies Act, 2013.

- The holding of EGM meeting: It holds the Extra-ordinary General meeting on the due date, and transfers the required Special Resolution, to get the shareholder’s support for conversion of private company into a public company along with alteration in articles of the agreement, under section 14 for such conversion.

- Registrar of Company(ROC) filing: For alteration in the Article of Association for the conversion of a public limited company under section 14, few E-forms will be filed and registered with the concerned Registrar of Companies at different stages as per the details mentioned ;

E-form- For filing special resolution with ROC, passed for conversion of private company into a public company.

- In case of modification in Article of Association for the conversion to a public company special resolution, it requires to be passed under section 14. According to section 117(3)(a), a copy of this special resolution is expected to be filed with the concerned ROC through the filing of form MGT.14 within 30 days of passing the resolution in the EGM.

- According to Rule 33 of Companies (Incorporation) Rules, 2014, for convert a private company into a public company, the application shall be listed in Form No. INC-27 with the fee. Moreover, the conversion of the company is to be registered in e-Form INC.27 to the ROC involved, with all the required annexures and with the prescribed fee.

- As per section 18, after receiving the documents for the conversion of a private limited company into a public limited company, ROC shall convince itself that the company complies with the necessary provisions for registering a company. If so convinced, ROC (Registrar of Companies) shall enclose the previous registration and issue a fresh certificate of incorporation, after registering the documents presented for change under the specific class of the company.

Documents Required for Conversion of Private Limited into a Public Company

- A copy of the directors’ PAN card.

- Passport size photographs of directors.

- Copy of Aadhar card or voter ID.

- Copy of the rental agreement.

- Electricity or water bill (Business place).

- The copy of property papers, if it is owned.
- Landlord NOC (No Objection Certificate) for providing the format.

Conversion of Private Limited Company into an OPC

The conversion of PLC (Private limited company) into an OPC (One Person Company) is provided as per the Companies Act, 2013, which implements a mechanism to convert one class of company into another. Section 18 of the Act, explicitly grants the conversion of an already registered private limited company starting from 1 April 2014.

The conversion of Private Company into OPC would not affect the responsibilities and contractual obligations of the company before conversion, and such claims, liabilities, obligations shall be enforceable by law, and the resulting OPC shall be liable for them.

Benefits of Converting Private Limited into an OPC

Limits Director’s Liability

Businesses often need to borrow money. With sole proprietorships, proprietors are personally liable for all the debt. So if it cannot be repaid by the business, the proprietor would have to sell his/her car, house or jewellery to do so. In an OPC, only the amount invested in starting the business would be lost; all personal property would be safe.

Continuous Existence

If a promoter were to operate as a sole proprietorship, rather than an OPC, the business would come to an end with his/her death. Since an OPC has a separate legal identity, it will pass on to the nominee director and, therefore, continue to exist.

Fewer Compliances

An OPC can only have one director and one shareholder, so annual filings are limited to share certificates and statutory registers.

Requirements to Convert Private Limited into an OPC

Here are some requirements to be followed to convert the private limited company into a one-person company:

The company should have suitably prepared its books of accounts as well as its balance sheet.
The company has listed and filed all ROC (Registrar of Companies) returns.
To examine whether the company has paid requisite on the result of the share certificate and that the share certificates are properly matched with the payment of stamp duty.
The company has deducted all TDS (Tax deducted at Source) and filed relevant TDS returns.
The company has paid VAT and Service Tax, or GST, and filed suitable returns before initiating the conversion.
To check whether the company is maintaining a record of minutes of the meeting, for its board and shareholders, and keep updated registers at its registered office.
The company is registered under the shop and the establishment acts as per the applicable state laws, where they control offices, shops, warehouses, etc.
The company complies with the requirements of the professional tax, if applicable in the state where the registered office of the company is located and the states in which it has employees.
The company is registered under PF, if the number of employees is more than 20 and with ESIC (Employees State Insurance Corporation), if the number of employees is more than 10, and if its listing monthly returns and paying dues as expected under PF and ESIC.

Check the below requirements to change a private limited companyinto the one-person company::

The provided capital of the company is less than Rs. 50 lakhs.
The annual turn over of the company should be less than Rs. 2 crores during the past three progressive financial years. Additionally, if the company is new, and has not completed three years, then the turnover shall be considered from the date of its incorporation.
The shareholder of the resulting OPC shall be only one individual of Indian nationality.
The shareholder of the OPC is a person residing in India for 180 days of one calendar year.
The shareholder of the resulting OPC must not have incorporated any other OPC, or he/she is not a candidate of any other OPC.
A minor cannot be a member or part of an OPC.

Documents Required to Convert Pvt Ltd to an OPC

The Form MGT-14 should be accompanied by the following attachments:

The EGM notice with the explanatory statement copy
A true certified copy of the special resolution
The altered MOA and AOA of the company
A certified copy of the board resolution.

The Form INC-6 should be accompanied by the following attachments:

The total list of creditors and members.
The latest balance sheet of the company.
A copy of the NOC letter of secured creditors.
The NOC of creditors and members.
The company directors should give a declaration through a duly sworn affidavit confirming that all creditors and members of the company have given their consent for conversion.

Procedure for Conversion of Pvt Ltd into an OPC

Gather a board meeting

The directors of the company must meet and decide on a date for calling the meeting of the shareholders. Additionally, known as an Extraordinary General Meeting (EGM).
The notice must be drafted to shareholders along with draft resolution. This must be passed as a special resolution to be adopted by the shareholder concerning the conversion of Private Limited Company to OPC.

Issue notice of EGM

The notice of EGM is expected to be given to all the members, directors and auditors of the company. The date of issue of the notice must be 21 days before the date of EGM.
Simultaneously, along with the notice and the agenda, the draft resolution is to be given as a special resolution, and an informative statement shall be included.

No objection form all creditors

Initially, before the date of EGM, the No Objection Certificate (NOC) from all the creditors of the company has to be obtained.
A copy of the approval from creditors is to be settled before the EGM.

Conduct of EGM

The EGM must be handled as per the notice, on the assigned date, time and place. The EGM can pass a special resolution concerning the approval of altered MOA (Memorandum of Association) and AOA (Articles of association)

Filing of resolution with the ROC

As per Companies Act, 2013 all the resolutions declared as a special resolution by the members must be registered with the ROC in Form No MGT-14, along with directed attachments within 30 days from the approaching date.
After the endorsement of the MGT-14, the ROC records the resolution on its record.

The issue of the certificate of conversion

On acceptance of the application for conversion, the Registrar of Companies having jurisdiction examines the application, and if complete, it is approved and issues a certificate of Private limited company into One Person Company.

How to Apply for Conversion of Pvt Ltd into an OPC

The application of the conversion of private limited company into a One-Person Company is filed using Form-INC-6 with the following statements.

A declaration of the form with an affidavit by all the directors that all members and creditors of the company have given consent to the conversion of company into an OPC, and that the paid-up capital of the company is less than Rs. 50 lakhs and that the turnover is less than Rs. 2 crores.
Affidavits from the members confirming the paid-up capital is less than Rs. 50 lakhs and the average turnover is less than two crores in the past three consecutive financial years.
A certificate from a practising Chatered Accountant to confirm that the paid-up capital of the company is less than Rs. 50 lakhs and the turnover is less than two crores.
The latest audited profit and loss account and balance sheet of the company.
No Objection Certificate from all creditors.
List of members and directors of the company.
Copy of the board resolution and the specific resolution taken at the EGM, along with its notices, agenda, and informative statement.
A modified copy of MOA and AOA, including related clauses, required for OPC.

How to Convert Proprietorship to a Private Limited Company ?

In India, many entrepreneurs initially start their business as a sole proprietorship because of its low compliance requirements. After certain years, the business will boom and the revenues involved will become more.

Now, in order to limit the liability and to detach the bank accounts and tax filing of an individual, a sole proprietorship to private limited company conversion will be done.

By conversion of proprietorship into private limited company under companies act 2013, it becomes a separate legal entity thereby reducing the risk of liability and the personal assets will remain untouched except in case of fraud.

The private limited company will be governed under the companies act, 2013, and the shares are held privately and not offered to the public. Similarly, the structure of taxation will be unique under income tax act, 1961, and different from the sole prorietorship, which considers the income as individual income.

Benefits of Conversion of Proprietorship into a Pvt Ltd Company

There are many benefits to converting a proprietorship to a private limited company. Some of the key benefits include:

Limited liability: In a proprietorship, the owner is personally liable for all the debts and obligations of the business. This means that if the business fails, the owner’s personal assets, such as their home or car, can be used to pay off the debts. In a private limited company, the liability of the shareholders is limited to the amount of money they have invested in the company. This means that if the business fails, the shareholders’ personal assets are not at risk.
Access to capital:Private limited companies are more likely to be able to raise capital from investors, as they are seen as being a more stable investment. This is because investors are less likely to lose their money if the company is a private limited company with limited liability.
Credibility: A private limited company is seen as being more credible than a proprietorship. This is because it is a separate legal entity with its own set of assets and liabilities. This can make it easier to do business with other companies and organizations.
Transferability of ownership: The ownership of a private limited company can be easily transferred to another person or entity. This can be useful if you want to sell your business or bring in new investors.
Tax benefits: Private limited companies can avail of certain tax benefits, such as lower corporate tax rates and depreciation allowances.
Compliance requirements: Private limited companies have more compliance requirements than proprietorships. This can be a burden, but it also helps to protect the interests of the shareholders and creditors.

However, there are also some disadvantages to converting a proprietorship to a private limited company. Some of the key disadvantages include:

Cost: The cost of converting a proprietorship to a private limited company can be significant. This includes the cost of legal fees, registration fees, and stamp duty.
Administration: Private limited companies have more administrative requirements than proprietorships. This includes the need to keep more records and file more reports.
Regulation: Private limited companies are more regulated than proprietorships. This means that they are subject to more government rules and regulations.

Differences Between Proprietorship and Pvt Ltd Company

Characteristic	Proprietorship	Private Limited Company
Number of owners	One	Minimum of two, maximum of 200
Liability of owners	Unlimited	Limited to the amount invested
Legal entity	No	Yes
Transferability of ownership	Easy	More difficult
Raising Capital	Difficult	Easier
Taxation	Owner’s personal income tax	Separate corporate tax
Compliance requirements	Few	More

Conditions to be Followed Prior Converting a Proprietorship to a Pvt Ltd Company

After incorporating a new private limited company, all the assets and liabilities of the old sole proprietorship will be completely transferred to the company.
Even after the conversion takes place, the old sole proprietorship will hold 50% of shares in a new private limited company. i.e 50% of the voting rights will be held by a sole proprietorship.
The old sole proprietor will hold shares for a minimum period of 5 years from the date of incorporation of a new private limited company.
Similarly, there will not be any monetary consideration between a sole proprietorship and private limited company as it is a mere conversion, not sale.

Requirements for Conversion of Proprietorship into Pvt Ltd Company

Agreement: The owner and the company need an agreement. This agreement will list the rules for the switch. This could include moving assets and debts, the value of the business, and other important points.
Memorandum of Association (MOA): The MOA of the company needs a clear goal to take over a sole proprietorship. This makes the switch legal and clear.
Move of Assets and Debts: All assets and debts of the business need to go to the company. This move should be written down and kept track of to make the switch easy.
Board of Directors and Shares: The owner should join the company’s board of directors. They need to have at least half of the voting power in the company. Remember, a company needs at least two directors.
Minimum Share Capital: A private limited company needs a certain amount of share capital. This is ₹1,00,000 (or the same value in other money). The owner must meet this rule when they switch.

Procedure for Conversion of Proprietorship into a Pvt Ltd Company

Before the Conversion from Sole Proprietorship to Private Limited Company

1. Transfer of Assets and Debts: After starting a new private limited company, all the assets and debts of the old business will be moved to the new company.
2. Ownership of Shares: Even after the change, the old business will keep 50% of the shares in the new company. This means the old owner will have 50% of the voting power.
3. Holding Period of Shares: The old owner will keep shares for at least 5 years from when the new company starts.
4. No Monetary Consideration: There will be no money paid between the old business and the new company. This is a change, not a sale.

Steps to Convert a Proprietorship Firm into Pvt Ltd Company

1. Complete Slump Sale Formalities:The owner should finish all steps related to the slump sale.
2. Obtain DIN and DSC: The owner should get the DIN and DSC for all future directors of the new company.
3. Check Name Availability: The owner should apply to check if the new company name is available.
4. Draft MOA and AOA: The owner should write the MOA and AOA of the new Private Limited Company. In MOA, he must say that the old business has been taken over by the company.
5. Apply for Company Registration: The owner should apply online to register the company on the Ministry of Corporate Affairs portal.
6. Submit Documents: All the documents should be sent with the application form.
7. Secure Certificate of Incorporation: The owner should then get the Certificate of Incorporation from the Registrar of Companies.
8. Apply for PAN and TAN Numbers: The owner should apply for PAN and TAN numbers from the right authority.
9. Update Bank Accounts: Finally, the bank accounts of the new company should be updated for business.

Procedure to Convert Proprietorship to a Pvt Ltd Company

The procedure to perform takeover of sole proprietorship by private limited company in India is as follows,

Step 1: Application for DSC (Digital Signature Certificate).
Step 2: Apply for the DIN (Director Identification Number)
Step 3: Application for the Name avalilability
Step 4: Filing of the EMOA and EAOA to register a private limited company
Step 5: Apply for the PAN and TAN of the company
Step 6: Issued certificate of incorporation by RoC with PAN and TAN
Step 7: Opening a current bank account on the company name

Documents Required for Conversion of Proprietorship Company to a Pvt Ltd Company

PAN Card: All directors need to give a copy of their PAN Card. This is for identity proof
Aadhar Card or Voters ID: This is needed for address proof.
Photos: Directors should provide passport size photos
Proof of Business Place: If the directors own the place of business, they need to show proof
Rental Agreement: If the business place is rented, a rental agreement is needed
NOC from Landlord: The landlord should give a No Objection Certificate (NOC)
Bill: A copy of an electricity or water bill is needed.

Forms for MCA:

Form 1: This form should be sent with the MOA, AOA, and other documents
Form 18: This form gives the details of the registered office
Form 32: This form has details about the directors.

FAQ's

For how long can a Sole Proprietorship exist alongside a newly formed Private Limited Company?

There is no fixed duration. It depends on the business owner’s strategy and legal compliance. Typically, the Sole Proprietorship may be dissolved or integrated into the new company once the Private Limited Company is established.

Can any individual register or start a private limited company?

Yes, any individual, including those of Indian origin, NRIs, OCIs, PIOs, and even foreign nationals, can start a private limited company in India with the necessary documents. The company must have at least 2 directors and can have up to 200 directors.

Are the assets of a Sole Proprietorship transferred to the Private Limited Company?

Yes, all assets and liabilities of a Sole Proprietorship should be transferred to the new Private Limited Company after the conversion.

Can only registered Partnership Firms be converted into LLP?

No! registered and unregistered Partnership Firms can be converted into LLP.

What is the main advantage of converting a Partnership Firm to an LLP?

The primary advantage of converting a Partnership Firm to an LLP is that the partners’ liability becomes limited. They are not personally liable for the LLP’s debts and obligations beyond their capital contributions.

What is one of the most important prerequisites for converting a firm into an LLP?

One of the most crucial prerequisites for converting a partnership into an LLP is obtaining the consent of all partners.

Who cannot be included as a partner in LLP?

The following types of persons cannot be included as a partner in an LLP:

A minor
An undischarged insolvent
A person of unsound mind
A person who has been convicted of an offence involving dishonesty or fraud
A person who has been disqualified from being a director of a company under the Companies Act 2013

What is the main advantage to convert a Partnership Firm to LLP?

The main advantage of converting a partnership firm to LLP is that the partners’ liability becomes limited, which means that they are not personally liable for the debts and obligations of the LLP beyond the amount they have contributed to the LLP’s capital.

What is the process of converting a private limited company to a public limited company?

Converting a private limited company to a public limited company involves several legal and procedural steps. This includes altering the Memorandum and Articles of Association, increasing the number of members and directors, and fulfilling regulatory requirements.

Who controls a public limited company?

Shareholders are the owners of a public limited company, but they elect a board of directors who manage and make decisions on behalf of the business.

How much does it cost to convert a Private Limited Company to an OPC?

The cost to convert a Private Limited Company to a One Person Company (OPC) in India can vary, typically ranging from ₹10,000 to ₹15,000. This includes government fees and professional fees. Fees may change, so contact CRSB today to convert your Pvt Ltd to OPC.

Is a Pvt Ltd company better than an OPC?

The choice between a Pvt Ltd company and an OPC depends on your specific situation. A Pvt Ltd company is ideal for businesses that aim to grow, need significant investment, or have multiple owners. An OPC is suitable for small businesses with a single owner, offering simplified management and reduced paperwork.