Conversion of Private limited company into LLP



Is it possible to get the conversion of the company into LLP in Bangalore? Will it be beneficial for the people attached to it? For this first of all let’s understand certain terms.

A private limited company is a type of business where a minimum of two people can start a business with the registration under the act 2013. Pvt. Ltd. Company has a separate legal entity and limited liability of members.

Limited liability partnership is also a type of business that came into the market in 2008 .limited liability market is is is registered under act 2008. It introduced in the et to start business easily and run in better way .its gives the benefits of both: - partnership and Pvt.  ltd company.

Why LLP is better than Pvt. Ltd company: -

If you want to start your business with less compliance and legal formalities and want to LLP is here for you.

LLP is only for covering the disadvantage of Pvt. Ltd. Company. An LLP has some major highlighted benefits which are mention here: -

  • Audit- LLP is free from audit or not a mandatory audit.LLP only comes in audit when your business turnover is more than 40 lakhs per year. But in Pvt., Ltd. Company audit is a must. 

  • Governing document – LLP needs only one document that is the LLP agreement .but Pvt. Ltd. Company needs MOA (memorandum of association), AOA (article of association), shareholders agreement so it’s a tough task.

  • Compliance of legal requirement – LLP has minimum compliance of legal requirement which reduce the pressure of legal process. On the other hand Pvt. Ltd. Company has a high compliance agreement.

  • Freedom to manage- LLP act 2008 gives the flexibility to manage its affairs.LLP agreement is formed by partners to decide the way they want to do and manage the business as compare to Pvt. Ltd. Company.

  • Taxation relaxation – LLP takes the benefits of a lower rate of taxation as compared to a company. Moreover, there is no dividend distribution like a company.

  • Easy to establish – LLP is very simple to start with the least government interference but in the company involves many formalities.

Steps for conversion Pvt. Ltd. Company into LLP-

  1. Name approval and DSC (digital signature certificate)

  2. Filing of forms with ROC(there are two forms we have to fill )

  1. Form 17 – (application and statement for conversing of a firm into LLP)

  2. Form fillip –(incorporation of LLP)

After approval of these two forms.

  1. Issue of registration certificate.

  2. LLP-agreement to be submitted in LLP-3  within 30 days

  3. Intimation to the registrar of firms.

  4. Finally, registration to make your company into LLP.


IMPORTANT- All partner's consent must be obtained before conversion of private limited company into LLP in Bangalore.

As we know, in the era of startups and energetic young people who are eagerly want to do their business 2008 gives the heart with lesser compliance and documentation a helpful business better way.

Comments

Post a Comment