What is a private limited company?

Where the shares of the company are held privately is known as a private limited company. The directors are appointed to conduct the business on your behalf or you conduct the business

What is a limited liability company?

As per the investment, the liability of all partners in the limited liability company is limited. In this kind of business, the partners' personal property cannot be kept. That's one of the most common reasons that individuals or businesses choose this as a partnership.

Conditions for conversion for LLP registration:

1. All the company's members should agree to the option of conversion
2. The partners of LLP will be the members of the Private company
3. An up-to-date copy of Income Tax Returns should be there with the Registrar of companies
4. The conversion must involve the approval of the members as well as the creditors of the private company
5. According to the Companies Act, no prosecution should start any of the processes to be followed.

The documents needed to change a private limited company into an LLP

1. Consent from all directors and shareholders of the company
2. Mandatory NOC from tax authorities
3. All creditors consent
4. Financial statement Income Tax Returns of last year
5. Must have the digital signature of all the directors
6. The documents of Pvt. Ltd. company

The process for changing a company into an LLP

1. Step 1: the designated partners must have the director's identification number. They should obtain a digital signature certificate before applying for DIN.
2. Step 2: a meeting must be called of all the board of directors for passing a resolution regarding the conversion of the company into an LLP. MCA must be informed about resolution along with necessary forms and application
3. Step 3: a certificate of approval must be obtained from the Registrar of Companies mentioning the name reserved for the LLP
4. Step 4: after the name has been reserved and allotted, the incorporation form must be filled along with the following documents:
   
   1. Address proof of the LLP's office
   2. Subscription sheets
   3. Consent from designated partners
   4. Identity proof of all partners
   5. Proof of residency for each designated partner
   6. Information about other companies that the LLP's partners own
       
5. Step 5: Form 18 must be filled in in addition to the incorporation form for the conversion of the company to LLP.
   Form 18 must contain the following information:
   1. Approval from the company's shareholders to become an LLP
   2. Updated income tax return
   3. Annual returns and most recent balance sheet as filed with the MCA
   4. Any judgement or court order in the company's favour or against
   5. Whether there is a security interest in the assets of the corporation
   6. Additionally, whether the existing shareholders are the partners of the intended LLP
   7. Whether the ROC had previously rejected a conversion application
   8. Similarly, a list of secured creditors with their consent for conversion
   9. A statement of accounts of the company verified by an independent auditor.
       
6. Company's shareholder statement
   Step 6: once the Registrar of the company verifies the information, a certificate of incorporation is issued. The corporation is then transformed into an LLP.
   Step 6: an LLP agreement must be drawn by the designated partners after the incorporation that must have the following details:
   
   • The LLP's Name
   • Name of all partners and designated partners
   • Rules of governance
   • Proposed business
   • Rights and duties of partners
   • Form of contribution
   • Profit-sharing ratio
   
    
7. Step 7: File E-Form-3 and E-Form-14
   In the following phase, two forms, Form-3 and Form-14, must be submitted.
   
   E-Form-3 contains data regarding the LLP Agreement. Within 30 days of your firm becoming an LLP, this form must be submitted along with the LLP agreement.
   
   The Registrar of Companies must be notified using E-Form-14 when a company is changed into a limited liability partnership. Within 15 days of the conversion, this form needs to be submitted. Last but not least, the following documents must be sent with Form 14:
   
   Copy of Incorporation Certificate
   Copy of E-Form FiLLiP