How to Convert an LLP to a Private Limited Company in India
LLPs looking to raise equity capital, bring on institutional investors, or access startup ecosystem benefits often need to convert to a Private Limited Company. Section 366 of the Companies Act 2013 and the Companies (Authorised to Register) Rules 2014 provide the statutory route for this conversion.
Before you start
- All designated partners' consent to conversion
- No pending litigation, winding-up petition, or insolvency proceedings
- All LLP statutory returns filed up to date (Form 8, Form 11)
- No secured creditors objecting to the conversion
- Proposed company name (must be available via RUN on MCA portal)
Step-by-step
Hold a Partners' Meeting and Pass Resolution
Hold a meeting of all designated partners and pass a resolution to approve the conversion of the LLP into a company. The resolution must specify the proposed company name, share capital structure, and the terms of conversion (how LLP interests translate into equity shares).
Publish Advertisement in Official Gazette and Newspaper
Publish a notice of the proposed conversion in one English and one vernacular newspaper circulated in the district of the LLP's registered office. This gives notice to creditors and the public. Keep proof of publication — required for Form URC-1 filing.
Obtain No-Objection from Creditors
Send individual notices to all known creditors of the LLP, inviting objections within 21 days. If no creditor objects, obtain a certificate from a CA/CS confirming no secured creditors have withheld consent.
File Form URC-1 with MCA
File Form URC-1 (Application for Registration as a Company) on the MCA portal. Attach: list of partners (equivalent to directors/shareholders), a statement of assets and liabilities (not older than 6 months), affidavit from partners, newspaper advertisements, list of pending legal proceedings, and the LLP Agreement.
Register as a Company and Receive COI
On verification, the RoC issues a Certificate of Incorporation to the newly registered Private Limited Company. The CIN of the new company is issued. The LLP's registration is simultaneously cancelled.
Post-Conversion Compliance
Update all third-party records: income tax PAN (new application for company PAN), GST registration (new GSTIN for the company), update bank account mandates, reissue employment letters noting the change of employing entity, and update EPFO/ESI records.
Common mistakes to avoid
- Not filing all LLP annual returns before conversion — the MCA system will reject URC-1 if any LLP filings are outstanding.
- Skipping the newspaper advertisement — this is a mandatory statutory requirement; its absence invalidates the URC-1 filing.
- Forgetting to cancel the old GSTIN after conversion — the LLP's GSTIN must be cancelled and a new GSTIN obtained for the company within 30 days of conversion.
- Not reissuing employment contracts — employees technically remain with the old entity until formally transferred to the new company; HR documentation must be updated.
Frequently asked questions
Does conversion cancel existing contracts and licences?
Contracts do not automatically transfer on conversion — review all major contracts and novate them to the new company. Licences (FSSAI, DGFT, etc.) must be transferred or re-applied for in the company's name.
What happens to LLP contributions after conversion?
Partner contributions in the LLP are converted into equity share capital in the company. The partners become shareholders in proportion to their LLP capital account balances as on the conversion date.
Is there stamp duty on conversion?
Some states levy stamp duty on the transfer of assets from the LLP to the company. Consult a CA to assess the stamp duty implication in your state — this can be a significant cost factor.
Can the converted company immediately raise equity funding?
Yes. Once the COI is issued for the company, it can issue shares to new investors. DPIIT recognition (if the LLP had it) does not automatically transfer — a fresh application for Startup India recognition under the new CIN may be needed.
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