Conversion of Companies
- Inclusive Of Govt. Fees
Conversion of Companies :
Section 18 of the Companies Act, 2013 deals with conversion of companies already registered. A company of already registered may convert itself as a company of another class by alteration of memorandum and articles of the company. The Registrar shall close the former registration of the company. After registering the documents relating to conversion, the Registrar shall issue a certificate of incorporation.
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Conversion of Private Limited Company into LLP - 2499/-
Limited Liability Partnerships (LLP) are emerging concept ever for business since introduction of the Companies Act, 2013. The LLP is a separate legal entity, liable to the full extent of its assets but the liability of the partners is limited to their agreed contribution in the LLP. LLPs are preferred form of business due to its good features of both Company and Partnership firm.
Need of Conversion from Company into LLP?
- LLP will have more flexibility as compared to a company.
- LLP will have lesser compliance requirements as compared to a company.
- A dividend received from Company is taxable in the hands of shareholders as per their applicable slab rate. While taxation structure for LLP is simpler. LLP is subjected only to Income tax. Dividend Distribution is not applicable on LLP. Once profit is declared and tax is paid by LLP, the distributed income is tax free in the hands of the partners.
- There is no stamp duty on all movable and immovable properties of the company; on conversion of a private limited company into LLP as such properties automatically vest in the LLP. No instrument required to be executed and hence no stamp duty is required to be paid
- Buy back is very complex and costly exercise in case of company. However, in LLP, partners can withdraw his/her capital at any point of time There is no tax implications on withdrawal of capital from LLP.
- No Capital gain tax shall be charged on transfer of property from the company to LLP, if the conditions stipulated in the Section 47(xiiib) of the Income Tax Act 1961, are fulfilled
- Carry forward and set off losses and unabsorbed depreciation of the company is deemed to be loss/depreciation of successor LLP the previous year in which conversion was effected, thus such loss can be carried for further 8 years in the hands of the successor LLP
Documents Required for Conversion of Company into LLP
- Consent of each of the shareholders of the company for conversion of the firm into LLP in the given format.
- Incorporation document in Form 2.
- Form 3- Form of application and declaration of incorporation of an LLP.
- The latest copy of Income tax return is to be filed with ROC.
- Clearance/no-objection certificate from tax authorities.
- Statement of assets and liabilities from the company.
- List of all the creditors along with their consent.
- Approval from any other country.
- Authorization to make a declaration.
- Optional attachments, if any.
Effect of Conversion :
- The private company will be deemed to be dissolved.
- The name of the private limited company will be removed from the register of the Registrar of Companies.
- On conversion, all properties, assets, interests, rights, privileges, liabilities, and obligations of the private limited company are transferred to the LLP.
- The conversion has no bearing on the existing liabilities, obligations, agreements, contracts, and continued employment.
- Permits or licenses issued under any written law to the Private Limited Company, and which are active before the date of conversion will not be transferred automatically to the Limited Liability Partnership.
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Requirements for conversion of company into LLP :
- Every member of the company must agree with the decision of conversion.
- All the members become the partners of an LLP.
- The latest copy of Income tax return is to be filed with ROC.
- Not just the members, all the creditors of the company must also agree with the conversion.
- Under Companies Act, no prosecution should have been initiated procedure to be followed
Conversion of One Person Company into Company - 2499/-
For converting an OPC into Private Limited Company, the provisions laid down in the Section-18 of the Indian Companies Act of 2013, and the Companies (Incorporation) Rules of 2014, in particular the Rule 7(4) of the Companies (Incorporation) Rules, 2014, needs to be followed.
One-person company can convert itself into any kind of company, i.e. One Person Company may convert voluntarily either into a private company with minimum of two members and two directors or a public company with at least of seven members and three directors in accordance with the provisions of section 18 of the Act. Procedure for conversion of One Person Company of the C