Conversion Of LLP To Private Limited Company In India

For many startups, beginning as a Limited Liability Partnership (LLP) feels like the perfect choice because it is flexible, tax-friendly, and simple to manage. But as the business grows and investors start asking for equity, ESOPs, or cap-table clarity, LLPs often hit their structural limits. They cannot issue shares, attract venture capital, or easily expand ownership. That is where the conversion of LLP to Private Limited Company becomes a game changer. This transition opens the door to venture funding, ESOP allocations for employees, and smoother share transfers. It also improves your company’s credibility in the eyes of investors, banks, and potential partners.

In this blog, we will explore:

• Legal basis and provisions under the Companies Act, 2013
• Eligibility conditions and checklist before conversion
• Step-by-step conversion process (fact-checked and updated for 2025)
• List of required documents for smooth filing
• Conversion fees and typical timelines
• Tax implications under the Income Tax Act, 1961
• Key benefits of becoming a Private Limited Company
• Common compliance tips and post-conversion obligations

Checklist for Conversion of LLP to Private Limited Company

Before starting the conversion process, it is important to make sure your LLP meets all the eligibility and documentation requirements. A well-prepared checklist helps prevent delays and ensures smooth approval from the Ministry of Corporate Affairs (MCA).

Eligibility Conditions

To convert an LLP into a Private Limited Company, the following conditions must be satisfied:

Consent of all partners

Every partner of the LLP must give written consent for the conversion. This collective agreement is the foundation for initiating the process.

No existing security interest

There should be no outstanding charge or security interest on the LLP’s assets. If there is, a written No Objection Certificate (NOC) must be obtained from the secured creditors before applying for conversion.

Updated statutory filings

The LLP should have completed all its statutory filings such as Form 8 (Statement of Accounts and Solvency) and Form 11 (Annual Return). Additionally, GST and Income Tax returns must be filed and up to date.

Compliance with Private Limited Company structure

The proposed company must fulfill the basic requirements under the Companies Act, 2013, which include:

• Minimum of 2 members.
• Minimum of 2 directors, with at least 1 director resident in India.
• A valid registered office address with ownership proof and a No Objection Certificate from the property owner (see company registration documents checklist).

Proper shareholding mapping

The partners of the LLP must become shareholders in the new company in the same proportion as their capital contribution in the LLP. This shareholding structure should be clearly documented and approved in the conversion plan.

Pre-Work

Before filing the conversion application, some groundwork must be completed to ensure smooth approval by the Registrar of Companies (ROC). Proper preparation reduces the chances of queries, resubmissions, or delays.

Hold a partners’ meeting

Conduct a formal meeting of all partners to pass a resolution approving the decision to convert the LLP into a Private Limited Company. This resolution should also authorize one or more partners to handle documentation and filings.

Decide on shareholding and directorship

Determine how the existing partners will be converted into shareholders and who will act as directors. Ensure that at least one director is an Indian resident as per Section 149(3) of the Companies Act, 2013.

Obtain name approval

Apply for name reservation through the MCA portal using the RUN (Reserve Unique Name) service. The proposed name must include the words “Private Limited” at the end and should not be identical or similar to an existing company or trademark.

Draft incorporation documents

Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) for the proposed Private Limited Company. These documents define the company’s objectives, internal governance, and shareholding structure.

Gather NOCs and supporting documents

Collect No Objection Certificates (NOCs) from secured creditors, property owners (for the registered office), and all partners. Also, keep identity and address proofs of directors and shareholders ready for filing (see documents required for company registration).

Complete pending compliances

Ensure that the LLP has no outstanding legal, financial, or compliance obligations. Any pending GST, income tax, or ROC filings must be completed before conversion to avoid rejection.

List of Documents Required for Conversion of LLP to Private Limited

Before applying for conversion, it is crucial to compile and verify all required documents. Incomplete or incorrect paperwork is one of the most common reasons for MCA form rejection. Below is the complete list of documents needed for a smooth transition from an LLP to a Private Limited Company.

1. From the LLP

• Incorporation Certificate of LLP issued by the Registrar of LLPs.
• LLP Agreement along with any amendments made till date.
• Partners’ Resolution approving the decision to convert the LLP into a Private Limited Company.
• List of all partners along with their capital contributions and profit-sharing ratios.
• Latest financial statements (Balance Sheet and Profit & Loss Account) of the LLP, duly certified by a Chartered Accountant.
• Up-to-date filings of Form 8 and Form 11 with the MCA.

2. From the Proposed Company

• Name Approval Letter obtained from the MCA (through RUN service).
• Memorandum of Association (MOA) and Articles of Association (AOA) drafted as per the Companies Act, 2013.
• Declaration by all directors and shareholders confirming compliance with Section 366 of the Companies Act.
• Consent to act as Director (DIR-2) along with self-attested ID and address proofs of all directors.
• Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) of proposed directors.
• Proof of registered office address, such as electricity bill or property tax receipt (not older than 2 months).
• No Objection Certificate (NOC) from the property owner if the premises are rented or leased.

3. Supporting and Compliance Documents

• Statement of Assets and Liabilities of the LLP certified by a Chartered Accountant.
• NOC from all secured creditors confirming no objection to the conversion.
• List of proposed shareholders and share allocation, mapping their capital contribution in the LLP to shareholding in the new company.
• Verification and consent from partners confirming that all liabilities of the LLP will be taken over by the company post-conversion.
• Affidavit and declaration by designated partners verifying the correctness of information provided in the application.

How To Convert an LLP into a Private Limited Company - Step-by-Step Conversion

Conversion of an LLP into a Private Limited Company is carried out under Section 366 of the Companies Act, 2013 and the Companies (Authorised to Register) Rules. The process requires partner approval, statutory notices, specified filings and supporting documents. Below is the practical, stepwise procedure combining the guidance you supplied and the standard MCA practice.

Step 1- Partner approval and resolution

Hold a formal meeting of all partners. Pass a resolution approving the conversion and authorise one or more partners to sign and file all necessary forms and documents. Obtain written consent from every partner. Record the resolution and keep it for filing.

Step 2- Eligibility, creditors and up to date compliance

Confirm the LLP meets eligibility conditions. Ensure there are at least two partners. Clear any existing security interests or obtain a written NOC from secured creditors. Complete and file all outstanding statutory returns such as Form 8 and Form 11, and ensure GST and Income Tax filings are current. Prepare the latest audited financial statements. Practical note: some practitioners require the financials to be very recent at the time of filing. Verify the requirement for how recent the audited statements must be for your ROC.

Step 3 - Name approval

Apply for name reservation. You can use the RUN service or the name reservation module of SPICe+ Part A. Historically INC-1 and INC-32 were used but SPICe+ (MCA V3) is now the principal route. Approved name is typically valid for a limited period, commonly 60 days. Start conversion steps after name approval.

Step 4 - Draft constitutional and incorporation documents

Prepare the draft Memorandum of Association and Articles of Association for the proposed company. Prepare a detailed list of partners, proposed directors and their identification details. Obtain Digital Signature Certificates for proposed directors and apply for DINs if any proposed director does not have one.

Step 5 - Public notice and newspaper publication

Publish a public notice of the proposed conversion in one English and one vernacular newspaper circulating in the district of the LLP. Use the prescribed format (URC-2). Keep proof of publication. The public notice allows objections, typically within 21 days. Retain the affidavit or certificate proving publication for filing.

Step 6 - File Form URC-1 with ROC (Application for conversion)

After the public notice period, file Form URC-1 (Application for conversion of an LLP into a company) with the ROC. Attach all required documents including:

• Partner resolution and written consents.
• Latest audited financial statements and statement of assets and liabilities certified by a CA.
• Copy of LLP Agreement and Certificate of Registration.
• Name approval letter.
• Draft MOA and AOA.
• List of partners mapped to proposed shareholders with share allocation based on capital contribution.
• NOC from secured creditors, if any.
• Proof of newspaper publication (URC-2).
• Affidavits and declarations from partners and proposed directors.

Practical timeline: some guidance says URC-1 should be filed within 30 days of name approval. Confirm the exact ROC timeline for your jurisdiction at time of filing.

Step 7 - Incorporation filings for the new company (SPICe+ / e-forms)

Alongside or after URC-1 approval, file the incorporation forms for the new company. In current MCA practice this is usually SPICe+ (integrated form) plus e-MOA and e-AOA uploads. Earlier form numbers like INC-32, INC-33 and INC-34 were used; under SPICe+ those functions are integrated. Pay the prescribed fees. Provide proof of registered office, DIR-2 consents, PAN and TAN applications as needed.

Step 8 - Certificate of Incorporation and effect of conversion

If ROC is satisfied, the Registrar issues a Certificate of Incorporation for the new Private Limited Company. From the date of incorporation the LLP is dissolved and the company succeeds to all assets, liabilities, rights and obligations of the LLP as per Sections 368 and 369 of the Companies Act. Inform stakeholders, creditors, vendors, customers and regulators about the change.

Step 9 - Post conversion compliance and practical steps

After conversion complete you must:

• Update PAN, TAN and GST registrations to the new company and complete any required migration.
• Open bank account in the company name and transfer funds and assets.
• Convene the first board meeting, appoint the statutory auditor, and file required board resolutions and share allotment forms.
• Update contract documentation, licenses, permits and creditor records.
• Maintain company statutory registers and comply with all company law filings.

Estimated timeline

If all documents are correct and there are no objections, the process typically takes a few weeks to a couple of months depending on ROC workload, publication objection windows and whether creditors raise issues. Some practitioners report 3 to 5 weeks in straightforward cases. Expect longer if the public notice attracts objections or if secured creditors require documentation.

Ready to convert your LLP into a Private Limited Company? Explore our hassle-free LLP to Pvt Ltd Conversion Package - expert assistance, end-to-end compliance, and ROC filing support - all in one place.

LLP to Private Limited Company Conversion Fees and Timelines

Converting an LLP into a Private Limited Company involves both government-mandated fees and professional service costs, along with a processing period that can vary depending on approvals and document accuracy.

Government Costs

• MCA Filing Fees: Payable for Form URC-1, SPICe+ incorporation forms, and other linked filings. The fee depends on the company’s proposed authorised share capital.
• Stamp Duty: Payable on the Memorandum of Association (MoA) and Articles of Association (AoA). The amount varies by state and capital amount mentioned in the incorporation documents.
• Name Reservation Fee: Applicable when applying for name approval through RUN or SPICe+ Part A on the MCA portal.

Professional Costs

• DSC/DIN Costs: If any proposed director does not already have a Digital Signature Certificate (DSC) or Director Identification Number (DIN), separate charges apply.
• Drafting & Legal Documentation: Costs for preparing the MoA, AoA, affidavits, resolutions, and declarations.
• Compliance and Filing Support: Fees for professional assistance from a Company Secretary, Chartered Accountant, or legal consultant to manage form filings, resubmissions, and communication with the Registrar of Companies (RoC).

Typical Timelines

• End-to-End Duration: Around 3 to 6 weeks under normal circumstances.
• Factors Affecting Timeline:
•  
• 1. RoC’s document scrutiny and approval speed.
  2. Objections or queries on name approval.
  3. Accuracy and completeness of supporting documents.
  4. Public notice period (for newspaper publication and objections).

Pro Tip: Submitting complete and error-free forms in one go can significantly reduce delays, as most resubmissions or clarification requests from the RoC can add 7–10 working days to the process.

Benefits of Converting to a Private Limited Company

Converting an LLP into a Private Limited Company brings several strategic, financial, and operational advantages. It helps your business evolve from a small partnership-style structure into a more formal, growth-ready corporate entity that investors, banks, and regulators trust.

1. Access to Equity Funding

A Private Limited Company can issue shares to investors, venture capitalists, or angel investors. This makes it easier to raise capital for expansion, unlike LLPs which cannot issue equity shares.

2. Better Credibility and Corporate Image

Private Limited Companies enjoy higher credibility among clients, vendors, and financial institutions. The “Pvt Ltd” tag enhances professional reputation and improves eligibility for government tenders and larger contracts.

3. Easy Ownership Transfer

In a Private Limited Company, ownership is defined by shareholding, making it easier to transfer or sell shares. This allows founders to bring in new investors or exit smoothly without dissolving the entire business.

4. Employee Stock Options (ESOPs)

Conversion enables you to offer ESOPs to employees, aligning their interests with the company’s growth and improving retention of key talent. LLPs do not have a similar provision.

5. Separate Legal Identity and Limited Liability

A Private Limited Company has its own legal identity, separate from its shareholders. This ensures that personal assets of directors remain protected even if the business faces liabilities.

6. Perpetual Existence

Unlike LLPs that depend on the continuity of partners, a Private Limited Company continues to exist regardless of changes in ownership or management. It provides long-term stability and confidence to stakeholders.

7. Easier Expansion and Compliance Integration

Post-conversion, a company can easily open subsidiaries, raise further capital, and comply with regulatory frameworks like FEMA and FDI policies. This flexibility supports both domestic and international growth.

Conversion of LLP to Private Limited Company: Tax Implications

While converting an LLP into a Private Limited Company provides strategic and financial flexibility, it is equally important to understand the tax implications of such conversion. The goal is to ensure the process remains tax neutral, meaning no capital gains or additional tax liability arises during or after conversion.

1. Tax Neutrality under Section 47(xiiib) of the Income Tax Act, 1961

According to Section 47(xiiib), if certain conditions are met, the conversion of an LLP into a Private Limited Company will not be treated as a “transfer” for income tax purposes. This means that no capital gains tax is payable at the time of conversion.

To qualify for this exemption, the following conditions must be fulfilled:

• All assets and liabilities of the LLP become those of the company after conversion.
• All partners of the LLP become shareholders of the company, and their shareholding must be in the same proportion as their capital contribution in the LLP.
• No partner receives any benefit other than shares in the new company.
• The total shareholding of the partners of the LLP must remain at least 50% for a period of five years after conversion.
• The new company must comply with all provisions of the Companies Act, 2013, and must file its returns and accounts on time.

If any of these conditions are violated, the exemption is withdrawn, and the conversion will be treated as a taxable transfer.

2. Carry Forward of Losses and Depreciation

If the conversion is done as per Section 47(xiiib), accumulated business losses and unabsorbed depreciation of the LLP can be carried forward to the new Private Limited Company. This helps in reducing future tax liabilities of the new entity.

3. Tax Rate and Compliance Changes

After conversion, the new company will be taxed under corporate tax provisions instead of LLP tax rules.

• The corporate tax rate (for domestic companies) is generally 22% under Section 115BAA (excluding surcharge and cess).
• The company will also need to comply with TDS, advance tax, and MAT (Minimum Alternate Tax) provisions if applicable.
• Annual filings such as Form ITR-6 and Tax Audit Reports (Form 3CA/3CD) become mandatory.

4. GST and PAN/TAN Transition

The GST registration, PAN, and TAN of the LLP cannot be transferred automatically. The newly incorporated Private Limited Company must:

• Apply for new PAN and TAN, and
• File an application for GST registration transfer or fresh registration, ensuring that the old LLP registration is canceled after completion of the conversion process.

5. Stamp Duty and Other Taxes

Although income tax exemption may apply, stamp duty is payable on the incorporation documents such as the MoA and AoA, based on the authorized capital and state laws. This cost is unavoidable and differs from state to state.

Conclusion

The conversion of LLP to Private Limited Company is not just a legal formality, it is a strategic decision that can redefine your business’s growth trajectory. By moving to a Private Limited structure, you unlock access to equity funding, ESOPs, and investor confidence while maintaining limited liability protection and a strong corporate identity. However, this process requires careful planning, proper documentation, and compliance with both the Companies Act, 2013 and the Income Tax Act, 1961 to ensure a smooth and tax-neutral transition. Preparing all statutory filings in advance and seeking professional guidance from a Company Secretary or Chartered Accountant can help you avoid common pitfalls and delays. In essence, converting your LLP into a Private Limited Company sets the foundation for scalability, credibility, and long-term sustainability, allowing your business to grow beyond partnership limitations and step confidently into the corporate landscape.

Disclaimer:
This blog is for informational purposes only and should not be considered legal or tax advice. Please consult our qualified legal professional before proceeding with the LLP to Private Limited Company conversion process.