Conversion of Company explained: this guide covers what Conversion of Company means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The Companies Act 2013 and LLP Act 2008 provide mechanisms for converting companies between different types. Conversion may be needed for raising capital, restructuring, or changing business requirements. Each conversion follows a specific legal process.
Conversion of Private Company to Public Company
A private company can convert to a public company by altering its Articles of Association to remove the three restrictions that make it a private company: limit on transferability of shares, limit of 200 members, and prohibition on public invitation for deposits/securities.
Process for Private to Public Conversion
- Pass special resolution in general meeting to alter Articles removing private company restrictions
- Ensure compliance: minimum 7 members, minimum 3 directors (public company requirements)
- File Form MGT-14 for special resolution within 30 days
- File Form INC-27 for conversion with ROC
- ROC issues fresh Certificate of Incorporation reflecting public company status
| Requirement | After Conversion to Public Company |
|---|---|
| Minimum members | 7 |
| Minimum directors | 3 |
| Minimum paid-up capital | No minimum prescribed currently (Rs.5 lakh removed) |
| Transferability of shares | Freely transferable |
| Add "Limited" to name | Remove "Private" from name |
Conversion of Public Company to Private Company
This conversion requires prior approval of the Regional Director (RD) in addition to the special resolution. The company cannot have:
- Outstanding deposits accepted from public
- Outstanding debentures or listed securities
- Any proceeding pending against the company under Sections 397-398 of old Act or equivalent
Process for Public to Private Conversion
- Pass special resolution for alteration of Articles to include private company restrictions
- File application in Form RD-1 with Regional Director
- Publish advertisement in newspaper
- Provide 21 days for objections
- RD passes order (usually within 30 days)
- File Form INC-27 with ROC after RD approval
- ROC issues fresh Certificate of Incorporation
Conversion of LLP to Private Limited Company
Section 366 of Companies Act 2013 allows LLPs, firms, or other associations to register as companies. An LLP converts to a Pvt Ltd company through the following process:
Eligibility Conditions
- LLP must have at least 2 members (at least 7 for public company)
- LLP agreement must permit conversion (or amendment needed)
- No CIBIL objection or pending litigation affecting business
- All designated partners become initial directors
Process for LLP to Company Conversion
- Obtain consent of all partners for conversion
- Prepare Memorandum and Articles of Association
- Apply for name availability for company
- File Form URC-1 with documents (list of members/directors, statement of assets/liabilities, consent of creditors, CA certificate)
- ROC issues Certificate of Incorporation on conversion
- File with RoC of LLPs Form 14 (intimation of dissolution of LLP)
Tax Implications of Conversion
Conversion of private company to public company has no direct tax implication as the company retains the same PAN. However, LLP to company conversion may have implications:
- Transfer of assets from LLP to company may be treated as transfer under Income Tax Act 2025
- Capital gains may arise in the hands of LLP on deemed transfer of assets
- However, if conditions under Section 47(xiiib) of ITA 2025 are met, conversion is tax-neutral
- Partners must surrender their LLP interest (not taxable if conditions met)
Conversion of Company to LLP
Under Section 58 of LLP Act 2008, a company can convert to an LLP. The process involves:
- All shareholders of company must become partners of LLP
- File Form 18 (application for conversion) with Registrar of LLPs
- Registrar issues certificate of conversion
- Tax neutral if conditions under Section 47(xiiib) ITA 2025 satisfied