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Conversion of Companies to LLPS and vice versa

Conversion of Company to LLP and LLP to Company in India

Change your legal structure without losing your business. Entrecap plans and files the conversion of a private or unlisted public company into an LLP, and of an LLP into a private company, from the eligibility and tax review to the MCA filings and the compliance that follows.

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India-based corporate and tax advisory firm, Mumbai. Serving entrepreneurs in India and abroad.

Private Limited Company Limited Liability Partnership (LLP)
  • Company to LLP. Sections 56 and 57 of the LLP Act, 2008.
  • LLP to Company. Section 366 of the Companies Act, 2013.
  • Tax. A company can move into an LLP tax-neutrally when the conditions are met.

Which direction fits your business?

A conversion keeps the same business running under a new legal form. Contracts, assets and liabilities move across by law, so you do not sell the business to yourself or start again from zero.

Company to LLP

Choose this when the business is closely held, does not need outside equity, and you want lighter compliance with a partnership-style agreement.

  • Professional, service and family-run businesses
  • No share issue or ESOP plans in view
  • Lower annual filing burden, with audit only above set thresholds
  • A tax-neutral route, if the conditions are met
See the process

LLP to Company

Choose this when you are raising equity, issuing ESOPs, bringing in investors or expanding, and need the structure lenders and large customers expect.

  • Venture, angel or strategic equity rounds
  • ESOPs and clear share-based ownership
  • Wider options for foreign investment
  • Credibility with banks, tenders and enterprise customers
See the process

Steps for conversion - both ways

Choose a direction and scroll. Each stage lights up as you reach it, so you can see what happens, what we prepare and what the Registrar receives. Switch direction at any time, here or at the end of the steps.

  1. Check eligibility and tax impact

    We confirm the company is private or unlisted public, that every shareholder will become a partner and that no secured creditor holds a subsisting charge without consent. The conversion is then tested against the tax-neutrality conditions, losses, GST credits and licences, and you receive a written go or no-go.

  2. Approve the conversion

    The board and shareholders approve the conversion. Capital contribution and profit-sharing ratios are fixed to match shareholding, designated partners are chosen, and digital signatures and DINs are arranged where needed.

  3. Obtain creditor and lender consents

    We prepare and collect consents or no-objection letters from secured creditors and lenders, and confirm there is no pending investigation or default that could stall the Registrar.

  4. Reserve the name and draft the LLP Agreement

    The LLP name is reserved, and we draft the LLP Agreement covering contributions, profit sharing, designated partners, exit and dispute terms, so it is ready to file the moment the conversion is approved.

  5. File the conversion with the Registrar

    We file Form 18 with the LLP's incorporation details and the prescribed attachments on the MCA portal. The Registrar scrutinises the filing and issues the certificate of registration on conversion. The company ceases and the LLP carries on the business.

  6. Move the business across

    The LLP Agreement is filed in Form 3 within 30 days. We then update PAN, TAN, GST, bank accounts, licences and contracts, complete the company's final income-tax and ROC filings, and set up the LLP's compliance calendar.

  1. Review the structure and tax position

    We confirm why a company is needed (funding, ESOPs, foreign investment or scale), review the LLP's accounts, pending filings and contracts, and model the tax and stamp-duty position before you commit.

  2. Agree the share structure

    Partners agree how contributions convert into shareholding, who will be directors and what the Articles should say. The consent of the partners is documented as the LLP Agreement requires.

  3. Arrange signatures, directors and name

    Digital signature certificates and DINs are arranged for the proposed directors, and the company name is approved through SPICe+ Part A, with the LLP suffix replaced by the company suffix.

  4. Publish the public notice

    A notice inviting objections is published in Form URC-2 in two newspapers, one in English and one in the local language of the registered office. The main filing can proceed only after 21 days from publication.

  5. File URC-1 with SPICe+

    We file URC-1 with SPICe+ Part B, the e-MoA and e-AoA and the supporting declarations, along with the list of partners, the LLP's latest income-tax return and the other attachments the Registrar asks for.

  6. Start life as a company

    On the certificate of incorporation we help with the bank account, GST and tax registrations, the first auditor, the commencement declaration and the first board calendar. See our guide to first compliances for a new private limited company.

Timelines depend mainly on creditor consents and Registrar processing. We give you a dated plan at the start, and the engagement letter lists every item before work begins.

Tax is where the route is decided

Company to LLP is tax-neutral only if every condition is met (Section 47(xiiib), now in the Income-tax Act, 2025).

  • Any breach withdraws the relief (Section 47A(4))
  • Losses can carry forward into the LLP (Section 72A(6A))
  • LLP to company: tax depends on structure, so we model it first
Read more about Income tax Consultancy
  • All assets and liabilities pass to the LLP
  • Shareholders become partners in the same ratio
  • No payment other than capital and profit share
  • Turnover up to ₹60 lakh in each of the last three years
  • Assets up to ₹5 crore in each of those years
  • At least half of the profit share kept for five years
  • No payout from accumulated profits for three years

What Entrecap handles for you, and what to watch for

From feasibility to the first annual filing.

Eligibility and structuring

Choose the right direction and route.

Tax and accounts review

Tax tests, losses, GST credits, closing accounts.

Drafting and documents

Resolutions, consents, LLP Agreement, MoA and AoA.

Creditors, charges and regulators

Lender consents and Registrar queries handled.

Pending defaults cleared first

Overdue filings can block approval.

MCA filings, end to end

Form 18, URC-2, URC-1 and SPICe+.

Contracts, licences and registrations

PAN, TAN, GST, bank and licences migrated.

Employees, PF and ESI

Service and payroll continue unbroken.

Property and stamp duty

Stamp duty varies by state; checked first.

Effective date and timing

Date chosen with your books in mind.

Starting a new entity instead of converting? LLP formation Private Limited formation

Frequently Asked Questions (FAQs) – Everything you need to know

No. Incorporation is done remotely. Directors and shareholders sign documents in their own jurisdiction, witnessed and apostilled (or notarised, depending on country). We coordinate everything else from Mumbai.

A specific, finite list — defence beyond a threshold, certain media, multi-brand retail, lottery, atomic energy and a few others — needs government approval, sectoral caps, or is prohibited. We check this before we discuss structure.

Fixed-fee for defined setup work; retainer or matter-by-matter thereafter. The engagement letter sets out every item before work begins, in your preferred currency where possible.

What usually follows

The next steps after this service

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