Saving Mantra Blogs

STEP-BY-STEP PROCESS FOR LLP TO PRIVATE LIMITED COMPANY CONVERSION

Written by

Financial Analyst

in

Step 1: Obtain DSC & DIN for Proposed Directors

The new company (post-conversion) must have:

  • Minimum 2 Directors
  • DSC (Digital Signature Certificate)
  • DIN (Director Identification Number)

If LLP partners do not have DIN, they must apply.

✔ Step 2: Reserve the New Name Using RUN

Apply for name reservation through the RUN (Reserve Unique Name) service on MCA portal.

Name guidelines:

  • Must include “Private Limited” at the end
  • Should not violate trademark rules
  • LLP name can be retained if available

After approval, you get a Name Reservation Letter.

✔ Step 3: Publish Newspaper Advertisement (Mandatory)

As per Section 366, the LLP must publish a notice of conversion in:

  • 1 English newspaper
  • 1 Vernacular (local language) newspaper

This informs the public about the conversion proposal.

✔ Step 4: Prepare Required Declarations & Affidavits

The LLP must prepare:

  • List of proposed directors/shareholders
  • Statement of Assets and Liabilities
  • Consent of all partners
  • Declaration stating no objection to conversion
  • Undertaking that all liabilities are fully disclosed

✔ Step 5: File URC-1 for Conversion Approval

Form URC-1 (Companies Authorized to Register) must be filed with MCA.

Attachments include:

  • Statement of assets & liabilities
  • LLP Registration Certificate
  • Newspaper advertisement copy
  • List of partners & proposed directors
  • Consent letters
  • MOA & AOA draft
  • Utility bill of office
  • NOC from property owner

URC-1 is the core step for conversion approval.

✔ Step 6: File SPICe+ (INC-32) for Incorporation

After URC-1 approval, file SPICe+, which includes:

  • INC-33 (e-MOA)
  • INC-34 (e-AOA)
  • AGILE-PRO (for GST, EPFO, ESIC, Bank Account, Shops Act, etc.)

This officially registers the new Private Limited Company.

✔ Step 7: Issue Certificate of Incorporation

Once MCA approves SPICe+, you will receive a Certificate of Incorporation (COI) with:

  • New Company Name
  • CIN (Corporate Identification Number)
  • Date of incorporation

This marks the completion of the conversion.

✔ Step 8: Transfer Assets, Liabilities & Bank Accounts

Post-incorporation:

  • Transfer all assets & liabilities from LLP to the new company
  • Update bank accounts
  • Update GST, MSME, Shops Act, and other registrations
  • Inform vendors, customers, and stakeholders

Benefits of Converting LLP Into Private Limited Company

  • Better access to funding from investors
  • Limited liability + structured shareholding
  • Higher credibility with banks and customers
  • Easy transfer of ownership
  • Ability to issue shares and raise equity
  • Eligible for startup investors (Angel, VC, PE)

Common Mistakes to Avoid

  • Not publishing newspaper advertisement
  • Incorrect documents in URC-1
  • Not obtaining partner consent
  • Not updating GST or bank accounts
  • Using LLP name in invoices after conversion

SavingMantra recommends verifying all documents before filing.

Frequently Asked Questions (FAQ)

1. Can all LLP partners become directors in the new company?

Yes, they can become both shareholders and directors.

2. Will PAN change after conversion?

Yes, the new Pvt Ltd Company gets a new PAN.

3. Is GST migration automatic?

No, GST must be updated or re-registered using the new company PAN.

4. Is LLP dissolved after conversion?

Yes, after conversion approval, the LLP ceases to exist as a separate entity.

5. How long does conversion take?

Typically 20–40 days, depending on MCA processing.

Conclusion

Converting an LLP into a Private Limited Company is an excellent decision for businesses looking to scale, raise investments, or enhance corporate credibility. With the right documentation and compliance steps, the process is smooth and beneficial.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

More posts