CONVERSION OF UNLISTED PUBLIC COMPANY TO LLP

CONVERSION OF UNLISTED PUBLIC COMPANY TO LLP

Key Benefits

A) Tax Benefits
The most important reason for conversion of a company into an LLP is on the tax front. Currently, the Income-tax Act, 1961, provides for payment of minimum alternate tax (MAT) as also for payment of dividend distribution tax (DDT) by companies. An LLP, which is not a company, should not be liable to pay DDT.

B) No Limit on number of shareholders/partners
Unlike private limited companies (shareholders limited to 50), an LLP can have unlimited number of partners.

C) Minimal Compliance Level & Cost effective model
There is no need of compliances related to meetings and maintenance of huge statutory records.

D) Automatic transfer
All the assets and liabilities of the Company immediately before the conversion become the assets and liabilities of the LLP.

E) No Stamp Duty
All movable and immovable properties of the company automatically vest in the LLP. No instrument of transfer is required to be executed and hence no stamp duty is required to be paid.

F) No Capital Gain Tax
No Capital Gains tax shall be charged on transfer of property from Company to LLP.

G) Continuation of Brand Value
The goodwill of the Company and its brand value is kept intact and continues to enjoy the previous success story with legal recognition.

H) Carry Forward and Set off Losses and Unabsorbed Depreciation
The accumulated loss and unabsorbed depreciation of Company is deemed to be loss/ depreciation of the successor LLP for the previous year in which conversion was effected. Thus such loss can be carried for further eight years in the hands of the successor LLP.

Application for conversion in E-Form 18 to be submitted by the Shareholder of the Company covering name, registration number and date of
Incorporation of the Company, consent of all shareholders of the Company along with following details:

• Whether any security interest in the assets of the company is subsisting or in force
• Whether up to date Income-tax return is filed under the Income-tax Act, 1961.
• Whether any prosecution initiated against or show cause notice received by the company for alleged offences under the Companies Act, 1956.
• Whether any proceeding by or against the company is pending in any Court or Tribunal or any other Authority.
• Whether any conviction, ruling, order, judgment of any Court, Tribunal or other authority in favour of or against the company is subsisting.
• Whether any clearance, approval or permission for conversion of the company into limited liability partnership is required from any body/ authority. etc
All the eforms will be digitally signed by any Designated partner and shall be certified by an advocate/company secretary/chartered accountant/cost accountant in practice engaged in the formation of LLP.

Procedure to Convert Unlisted Public Ltd Company To LLP


STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6
Deciding The Number Of Designated Partners

 There Should Be Minimumb 2 Dp
Obtaining The Din And Dsc Of Designated Partners Checking The Name Availbility

Drafting The Llp Agreement

Form 1

Filling Of Incorporation Documents

Form 2 & With Necessary Attachments

Filling Of Form 18

Filling Of Form 3 Along With The Llp Agreeement