Skip to content Skip to sidebar Skip to footer
Close
Business Conversions

Business Conversions

Comprehensive Guide to Company Conversions

Below is a detailed guide to various company conversions, including eligibility requirements, step-by-step processes, documents required, and the benefits of each conversion.

1. Proprietorship to Private Limited Company

Overview:

The conversion process is similar to a regular private limited company registration, focusing on transferring the assets and liabilities of the proprietorship to the private limited company.

Process:

  1. File for Digital Signature Certificates (DSC) for the directors.
  2. Reserve the company name using RUN (Reserve Unique Name).
  3. File for incorporation using SPICe+ (INC-32)along with e-MOA and e-AOA.
  4. Transfer the assets and liabilities of the proprietorship to the private limited company.

Documents Required:

  • PAN and Aadhaar of the proprietor.
  • Proof of office address and NOC from the landlord.

2. Partnership to Private Limited Company

Overview:

The conversion process is similar to a regular private limited company registration, with the dissolution of the partnership firm and transfer of its assets and liabilities to the private limited company.

Process:

  1. File for DSC and DIN for proposed directors.
  2. Reserve the company name using RUN.
  3. File incorporation forms (SPICe+) along with MOA and AOA.
  4. Execute a partnership dissolution deed.

Documents Required:

  • PAN of the firm.
  • Partnership deed.
  • Address proof of partners.

3. LLP to Private Limited Company

Eligibility Requirements:

  • All partners of the LLP must consent to the conversion.
  • The LLP must have complied with its annual filings and tax returns.

Step-wise Process:

  1. Pass a resolution for conversion in the LLP.
  2. Reserve the name of the private limited company using RUN.
  3. File Form URC-1with details of LLP partners, assets, and liabilities.
  4. File incorporation forms (SPICe+) along with MOA and AOA.
  5. Obtain a Certificate of Incorporation from the Registrar of Companies.

Documents Required:

  • LLP Agreement and PAN.
  • Consent of partners.
  • Financial statements of the LLP.
  • Proof of office address and NOC.

Benefits:

  • Access to equity funding.
  • Improved credibility as a private limited company.

Relevant Laws/Forms Used:

  • RUN, URC-1, SPICe+, INC-22.

4. OPC to Private Limited Company

Eligibility Requirements:

  • OPC’s paid-up capital exceeds ₹50 lakh or turnover exceeds ₹2 crores.
  • A minimum of two shareholders and directors is required.

Step-wise Process:

  1. Pass a shareholder resolution for conversion.
  2. Appoint additional shareholders and directors.
  3. File Form INC-6with the required documents.
  4. Alter MOA and AOA to reflect the new structure.
  5. Obtain a Certificate of Incorporation.

Documents Required:

  • PAN and Aadhaar of sole member and additional members.
  • Financial statements and proof of registered office address.

Benefits:

  • Facilitates business scaling.
  • Allows for multiple shareholders and increased investment.

Relevant Laws/Forms Used:

  • INC-6, MGT-14.

5. Public Limited to Private Limited Company

Eligibility Requirements:

  • Approval from the board and shareholders through a special resolution.
  • No outstanding liabilities.

Step-wise Process:

  1. Approve the conversion through a board resolution.
  2. Obtain shareholder approval through a general meeting.
  3. File MGT-14with details of the resolution.
  4. File INC-27for conversion with ROC.
  5. Alter MOA and AOA to reflect the private limited company structure.

Documents Required:

  • Board and shareholder resolutions.
  • MOA and AOA amendments.

Benefits:

  • Simplified compliance requirements.
  • Increased operational flexibility.

Relevant Laws/Forms Used:

  • MGT-14, INC-27.

6. Proprietorship to LLP

Overview:

This conversion process is similar to registering a new LLP and involves transferring the proprietorship’s assets and liabilities to the LLP.

Process:

  1. File for DSC and DPIN for proposed partners.
  2. Reserve LLP name using RUN-LLP.
  3. File incorporation forms (FiLLiP) and execute an LLP agreement.

Documents Required:

  • PAN and Aadhaar of the proprietor.
  • Proof of office address and NOC from the landlord.

7. Partnership to LLP

Overview:

Similar to registering an LLP, with the addition of transferring the partnership’s assets and liabilities to the LLP.

Process:

  1. File for DSC for partners and reserve the LLP name using RUN-LLP.
  2. File incorporation forms (FiLLiP) and execute an LLP agreement.

Documents Required:

  • PAN of the partnership firm.
  • Partnership deed.
  • Address proof of partners.

8. Private Limited to LLP

Eligibility Requirements:

  • All shareholders and directors must consent to the conversion.
  • No secured loans against the company.

Step-wise Process:

  1. Pass a board resolution for conversion.
  2. Reserve the LLP name using RUN-LLP.
  3. File incorporation forms (FiLLiP) and register the LLP agreement within 30 days.

Documents Required:

  • MOA and AOA of the private limited company.
  • Shareholder consent and financial records.

Benefits:

  • Reduced compliance burden.
  • Simplified operational structure.

Relevant Laws/Forms Used:

  • RUN-LLP, FiLLiP, Form 3.

9. Private Limited to Public Limited Company

Eligibility Requirements:

  • Minimum of 7 shareholders and 3 directors.

Step-wise Process:

  1. Pass a board resolution for conversion.
  2. Obtain shareholder approval through a general meeting.
  3. File MGT-14and INC-27 for conversion.
  4. Alter MOA and AOA to reflect the public limited company structure.

Documents Required:

  • Board and shareholder resolutions.
  • MOA and AOA amendments.

Benefits:

  • Facilitates raising public capital.
  • Enhances company credibility.

Relevant Laws/Forms Used:

  • MGT-14, INC-27.

10. Private Limited to OPC

Eligibility Requirements:

  • The company’s turnover must be less than ₹2 crores.

Step-wise Process:

  1. Pass a board resolution for conversion.
  2. File Form INC-6with required documents.
  3. Alter MOA and AOA to reflect OPC status.

Documents Required:

  • MOA and AOA amendments.
  • Shareholder consent.

Benefits:

  • Simplifies compliance.
  • Retains limited liability.

Relevant Laws/Forms Used:

    • INC-6, MGT-14.

Comparison Table: Company Conversions

Conversion Type

Eligibility Requirements

Key Forms to Be Filed

Documents Required

Benefits

Proprietorship to Pvt Ltd

Similar to Pvt Ltd registration

RUN, SPICe+ (INC-32), e-MOA, e-AOA

PAN, Aadhaar, proof of office address, NOC

Limited liability; access to funding

Proprietorship to Pvt Ltd

Similar to Pvt Ltd registration

RUN, SPICe+ (INC-32), e-MOA, e-AOA

PAN, partnership deed, proof of address

Equity funding; operational flexibility

LLP to Pvt Ltd

Partner consent; annual compliance

RUN, URC-1, INC-32, MOA, AOA

LLP agreement, financials, partner consent

Access to equity funding

OPC to Pvt Ltd

Paid-up capital > ₹50 lakh or turnover > ₹2 cr

INC-6, MGT-14

PAN, Aadhaar of members, financial records

Scale operations; attract investors

Public Ltd to Pvt Ltd

Board and shareholder approval required

MGT-14, INC-27

Resolutions, MOA, AOA amendments

Simplified compliance

Proprietorship to LLP

Similar to LLP registration

RUN-LLP, FiLLiP

PAN, Aadhaar, proof of office address, NOC

Limited liability; operational flexibility

Partnership to LLP

Similar to LLP registration

RUN-LLP, FiLLiP

PAN, partnership deed, address proof

Reduced compliance; easier management

Pvt Ltd to LLP

Shareholder consent, no secured loans

RUN-LLP, FiLLiP

MOA, AOA, shareholder consent, financial records

Cost-effective; reduced compliance

Pvt Ltd to Public Ltd

Minimum 7 shareholders, 3 directors

MGT-14, INC-27

Board and shareholder resolutions, MOA, AOA amendments

Public funding; increased credibility

Pvt Ltd to OPC

Turnover < ₹2 cr

INC-6, MGT-14

MOA, AOA amendments, shareholder consent

Simplified compliance