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Key Benefits

  • Grants access to external equity funding from Venture Capitalists, Angel Investors, and Private Equity firms.
  • Facilitates the implementation of Employee Stock Option Plans (ESOPs) to attract and retain top-tier talent.
  • Enhances the company's valuation and marketability for future mergers, acquisitions, or an Initial Public Offering (IPO).
  • Provides a more robust governance framework preferred by large financial institutions and international banks for credit facilities.

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7 Years

Of Experience

Cases Solved Icon

3622 +

Cases Solved

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10 +

Awards Gained

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144 k +

Trusted Clients

Queries Solved Icon

36 k+

Queries Solved

Experience Icon

7 Years

Of Experience

Cases Solved Icon

3622 +

Cases Solved

Awards Gained Icon

10 +

Awards Gained

Trusted Clients Icon

144 k +

Trusted Clients

Queries Solved Icon

36 k+

Queries Solved

Experience Icon

7 Years

Of Experience

Cases Solved Icon

3622 +

Cases Solved

Awards Gained Icon

10 +

Awards Gained

Trusted Clients Icon

144 k +

Trusted Clients

Queries Solved Icon

36 k+

Queries Solved

Overview

The conversion of a Limited Liability Partnership (LLP) into a Private Limited Company is a
strategic progression for businesses looking to dilute equity or raise capital. This transition
is primarily governed by Section 366 of the Companies Act, 2013, often referred to as a
"Part I Conversion." Under this provision, an existing LLP can be converted into a company
by a process of statutory vesting, where all assets and liabilities are transferred to the new corporate entity by operation of law.

In the 2026 MCA V3 regulatory ecosystem, the conversion is no longer a "dissolution"
followed by "incorporation." Instead, it is a seamless transition initiated through e-Form
URC-1. A prerequisite for this conversion in 2026 is that the LLP must have at least seven
partners if converting to a Public Company, or two partners if converting to a Private
Limited Company. Furthermore, the LLP must publish a public notice in two newspapers
(one English and one vernacular) to invite objections from any stakeholders or creditors.

For the FY 2025–26 cycle, the conversion must be supported by a "Statement of Accounts"
not older than 30 days from the date of filing, certified by a Chartered Accountant.
Additionally, as per the latest governance standards, the converting entity must
demonstrate that it has transitioned its accounting records to Audit Trail (Edit Log)
enabled software. This ensures that the historical compliance data of the LLP is preserved
and transparently migrated to the Private Limited Company’s books. Upon approval, the
ROC issues a fresh Certificate of Incorporation (CoI), and the LLP stands dissolved by
operation of law, with its brand and operational history fully intact within the new
company.

Document Required (Option A)

Documents
  • 1 Permanent Account Number (PAN) Card of the existing LLP.
  • 2 PAN Card of all the Partners/Directors.
  • 3 Aadhaar Card of all the Partners/Directors (Mobile linked).
  • 4 Latest Audited Financial Statements of the LLP (not older than 30 days).
  • 5 Partnership Deed and all supplementary deeds of the LLP.
  • 6 No Objection Certificate (NOC) from all secured creditors.
  • 7 Newspaper Clippings of the public notice published in Form URC-2.
  • 8 Verification by a CA/CS/CMA certifying the assets and liabilities statement.
  • 9 Consent Letters from all partners for the proposed conversion.

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Procedural Steps (The Transition)

Step Name Short Description Estimated Timeline
Partner Resolution Passing a formal resolution among partners to approve the conversion. 1–2 Days
Newspaper Notice Publishing a public notice in Form URC-2 in two local newspapers. 7–10 Days
Name Reservation (RUN) Reserving the company name (usually identical to the LLP name). 2–3 Days
Form URC-1 Filing Filing the application for conversion along with partner/creditor consents. 5–7 Days
SPICe+ Part B Filing Integrated filing for incorporation, PAN, TAN, and DIN allotment. 5–7 Days
Certificate of Incorporation Final issuance of the CoI by the Central Registration Centre (CRC). 3–5 Days

Post-Conversion Filings

Compliance Name Description Due Date
Commencement (INC-20A) Mandatory declaration filed before starting any business operations. 180 Days from CoI
Share Certificate Issue Issuing share certificates to the erstwhile partners (now shareholders). 60 Days from CoI
Bank/GST Migration Updating the entity's status and tax IDs in bank and GST records. 30 Days from CoI
LLP Agreement Termination Closing the LLP records with the ROC postincorporation. Integrated

Penalty and Non-compliance Risk

Triggering of Capital Gains Tax under Section 45
Rejection of URC-1 due to creditor objections
Deactivation of Director Identification Number (DIN)
Invalidation of the conversion process due to stale financial statements
Penalty for non-filing of Commencement of Business (INC-20A)
Personal liability of partners for pre-conversion dues
Suspension of GST registration due to non-updated status

FAQs

Is the conversion from LLP to Private Limited tax-neutral?

Yes, if the conditions under Section 47(xiii) of the Income Tax Act are met, including the retention of shareholding.

What is the minimum number of partners required?
Is a newspaper advertisement mandatory?
Does the LLP need to be registered with the ROF?
What happens to the existing LLP name?
Can an LLP with pending filings convert?
Is a fresh PAN issued for the company?
. What is Form URC-1?
How old can the financial statements be?
Do we need to draft a new MOA and AOA?

Seamless Compliance for Your Business

Focus on growing your business while we handle the complexities of statutory compliance. From GST filing to Annual Audits, our automated systems ensure you never miss a deadline.

CA
  • GST Filing & Reconciliation
  • Income Tax Returns (ITR)
  • TDS/TCS Returns
  • Statutory & Tax Audit
  • ROC Company Filings

What Our Clients Say

Discover what our satisfied clients have to say about their experience working with us

Sandeep Reddy
Founder, Retail Trading Business
" ARK Advisors made our audit process smooth and stress-free. Clear checklist, timely follow-ups, and very practical guidance. "
Anusha Sharma
Partner, Professional Services Firm
" Their team quickly identified compliance gaps and suggested actionable fixes. Reporting was crisp and easy for management to understand. "
Rohit Kulkarni
CFO, Manufacturing Unit
" We got strong process recommendations and control improvements. The audit insights genuinely helped us reduce leakage and improve discipline. "
Meghana Rao
Director, Startup
" Professional, responsive, and very transparent. They explained everything in simple terms and kept the entire process on schedule. "
Imran Khan
Owner, Hospitality Business
" The team ensured our documentation was audit-ready and supported us throughout. Great experience and strong attention to detail. "

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