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Llc/llp

TAPASYA (CA) (297 Points)

11 December 2017

HELLO THERE IS A PRIVATE LIMITED COMPANY..WHICH WANTS TO GET CONVERTED INTO LLP/LLC..I HAVE TWO QUESTIONS:

1) WHICH ONE IS BENEFICIAL??

2)WHAT IS THE PROCEDURE?

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3 Replies

SHIVA PRAKASH (PARTNER) (31 Points)
Replied 11 December 2017

Hi, Although I am not competent to answer, I am just sharing some experiences. We were registered under LLP. . When we had proposal to get investments through FDI route in to our company we had struggle to convert LLP into Privated Limited Company for many financial implications and limitations. Procedure involved lot of expense, and post conversion, getting so many licenses and registration changed to new nentity has been very tough. I should also mention to consider the cost involved in redocumentation for bank loans.

Please check.

shiva PRAKASH

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Priyanka Jhanwar (140 Points)
Replied 19 December 2017

There are some advantages and disadvantages in conversion of company into LLP:
Advantages:
* No borrowing limit
* Tax saving
* No B.M, AGM
* No audit(if turnover below 40lakh, contribution 25 lakh)
Drawback:
*Heavy penalty ( 100 per day)

PROCEDURE FOR CONVERSION OF PRIVATE COM INTO LLP:
FORM: LLP 1
ATTACHMENT: BOARD RESOLUTION FOR CONVERSION
FORM: LLP2(LINKED WITH LLP-18)
ATTACHMENT: CONSENT &SUBSCRIBER SHEET
ADFRESS PROOF OF REGISTERED
OFFICE OF LLP AND NOC
INTEREST IN OTHER ENTITY
CONVERSION LETTER
FORM:LLP 18
ATTACHMENT:
STATEMENT OF SHAREHOLDER
STATEMENT OF ACCOUNT
PAYMENT ACTION(ANNUAL FILING OF COM)
ITR COPY
IF CREDITOR THEN STATEMENT
FORM:LLP-3
ATTACHMENT
LLP AGREEMENT

Priyanka Jhanwar (140 Points)
Replied 19 December 2017

For conversion some points also be taken into account:
All shareholder should be partner of LLP
Contribution should be same as paid up capital
If Bank charges exist in company then satisfy charge before conversion