Third Schedule explained: this guide covers what it 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 Third Schedule, which applies under section 56, governs conversion of a private company into an LLP. A company may convert only if there is no security interest and the partners of the LLP are all the shareholders and no one else. The Schedule then sets out the statement to be filed, registration, the effects of conversion on property, proceedings, contracts and employment, and a twelve-month notice on correspondence. If you are planning a conversion, see our company to LLP conversion service.
A private company may convert if and only if there is no security and the partners of the LLP comprise all the shareholders of the company and no one else (para 2(2)). All shareholders file a statement with the Registrar, with the incorporation document and statement under section 11 (para 3). On registration the LLP exists, assets and liabilities vest in it, and the company is deemed dissolved (para 6). The LLP must show its conversion on correspondence for twelve months or face a fine (para 15).
Where it fits
Section 56 says "a private company may convert into a limited liability partnership in accordance with the provisions of this Chapter and the Third Schedule". Section 58 provides for registration and effect. See our articles on sections 56 and 57 and section 58. Our post on Form 18 under sections 56 and 57 and the guide on how to convert a private limited company into an LLP cover the filing.
The Schedule is printed with references to the Companies Act, 1956. The 2021 Act replaces "the Companies Act, 1956" with "the Companies Act, 2013" wherever it occurs (clause 2), and makes no other change to the Third Schedule. Check the official text for how the definition of "private company" in paragraph 1(a) now reads.
Paragraphs at a glance
| Para | Heading | What it provides |
|---|---|---|
| 1 | Interpretation | "Company" means a private company as defined in the Companies Act; "convert" means transfer of property, assets, interests, rights, privileges, liabilities, obligations and undertaking |
| 2 | Eligibility | No security ; partners are all the shareholders and no one else |
| 3 | Statements | Statement by all shareholders; incorporation document and statement under section 11 |
| 4 | Registration | Certificate; LLP informs Registrar of Companies within fifteen days |
| 5 | Refusal | Registrar not bound to register; appeal to Tribunal; verification |
| 6 | Effect | LLP exists; vesting; company deemed dissolved |
| 7 | Registered property | LLP notifies authority |
| 8 | Pending proceedings | May be continued by or against the LLP |
| 9 | Convictions, orders | May be enforced by or against the LLP |
| 10 | Existing agreements | LLP substituted |
| 11 | Existing contracts | Continue in force |
| 12 | Employment | LLP becomes the employer |
| 13 | Appointments, authority | Take effect as if given to the LLP |
| 14 | Approvals, permits, licences | Paragraphs 6 to 13 apply, subject to the other Act |
| 15 | Notice of conversion | Twelve months on correspondence; fine for default |
Paragraph by paragraph
Paragraph 1: meanings
"Company" means a private company as defined in clause (iii) of sub-section (1) of section 3 of the Companies Act, 1956 (the OCR text reads "(iil)"; we read it as (iii), so check the official text). "Convert" means a transfer of the property, assets, interests, rights, privileges, liabilities, obligations and undertaking of the company to the LLP in accordance with the Schedule.
Paragraph 2: eligibility
A company may convert by complying with the Schedule (2(1)). It may apply "if and only if" (2(2)):
- (a) there is no security ; and
- (b) "the partners of the limited liability partnership to which it converts comprise all the shareholders of the company and no one else".
The text of clause (a) is cut short in the OCR ("there is no security and"). The matching clause in the Fourth Schedule (para 3(a)) reads "there is no security interest in its assets subsisting or in force at the time of application", and the Third Schedule clause should be read the same way, but check the official text. After conversion, the company, its shareholders, the LLP and its partners are bound by the provisions of the Schedule applicable to them (2(3)).
Two practical consequences: an outside shareholder, such as an investor, must be made a partner or must be bought out before conversion, and charges or loans secured on the company's assets must be cleared. Our guide on conversion of a private company to an LLP covers the practice.
Paragraph 3: the statement
The company files with the Registrar:
- (a) a statement by all its shareholders, "in such form and manner accompanied by such fees as the Central Government may prescribe", with (i) the name and registration number of the company and (ii) the date on which the company was incorporated; and
- (b) the incorporation document and statement referred to in section 11.
Paragraph 4: registration and the fifteen days
The Registrar, subject to the Act and rules, registers the documents and issues a certificate stating the LLP is registered "on and from the date specified in the certificate". The proviso requires the LLP, within fifteen days of registration, to inform the Registrar of Companies with which it was registered of the conversion and the LLP's particulars, in the prescribed form and manner.
Paragraph 5: refusal and appeal
The Registrar need not register if he is not satisfied with the particulars or other information furnished; an appeal may be made to the Tribunal. A further proviso, marked in the footnote as inserted by G.S.R. 386(E) of 4 June 2009 (as printed), says that until the Tribunal is constituted under the Companies Act, 1956, the appeal may be made before the Company Law Board. The Registrar may require the documents to be verified as he thinks fit (5(2)).
Paragraph 6: effect of registration
On and from the date in the certificate:
- there is an LLP by the name specified;
- all tangible (movable or immovable) and intangible property vested in the company, all assets, interests, rights, privileges, liabilities and obligations, and the whole undertaking, are transferred to and vest in the LLP "without further assurance, act or deed"; and
- the company is "deemed to be dissolved and removed from the records of the Registrar of Companies".
Paragraphs 7 to 9: property, proceedings and judgments
Registered property: the LLP must, "as soon as practicable, after the date of registration", notify the relevant authority of the conversion in the form and manner the authority determines (para 7). Proceedings by or against the company pending in any Court, Tribunal or other authority "may be continued, completed and enforced by or against the limited liability partnership" (para 8). Convictions, rulings, orders or judgments in favour of or against the company may be enforced by or against the LLP (para 9).
Paragraphs 10 to 14: contracts, employment, authority and licences
- Para 10: agreements to which the company was a party have effect as if the LLP were the party, "whether or not of such nature that the rights and liabilities thereunder could be assigned".
- Para 11: deeds, contracts, schemes, bonds, agreements, applications, instruments and arrangements continue in force for and against the LLP.
- Para 12: contracts of employment continue with the LLP as employer.
- Para 13: appointments, authority and powers of the company take effect as if conferred on the LLP.
- Para 14: paragraphs 6 to 13 apply to approvals, permits and licences issued to the company under any other Act, "subject to the provisions of such other Act".
Note what is not in the Third Schedule: unlike the Second Schedule (para 16), it has no paragraph on shareholders' continuing personal liability. The text is silent; the old liabilities vest in the LLP under paragraph 6. For liability questions, take advice and check the official text.
Paragraph 15: notice of conversion
For twelve months, starting not later than fourteen days after the date of registration, every official correspondence of the LLP must carry (a) a statement that it was converted from a company into an LLP and (b) the name and registration number of the company. Default is "punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees and with a further fine which shall not be less than fifty rupees but which may extend to five hundred rupees for every day after the first day after which the default continues". The 2021 Act left this unchanged; it is a fine, not a penalty.
Example. Bhatia Foods Private Limited has four shareholders, no secured debt and no outsiders. All four sign the statement and become the four partners. The certificate is dated 10 June. From that date its assets and contracts stand in the LLP's name, the company is deemed dissolved, the Registrar of Companies is told within fifteen days, and every letter and invoice for the next twelve months says the LLP was converted from the company.
Need help converting a company?
The eligibility test, especially the absence of security and the identity of partners, decides whether you can convert at all. Our company to LLP conversion team can check eligibility and prepare the filing.
Key takeaways
- Eligibility: no security interest, and the LLP's partners are all the shareholders and no one else (para 2).
- All shareholders sign the statement filed with the incorporation document (para 3).
- The LLP informs the Registrar of Companies within fifteen days (para 4).
- On registration, property and liabilities vest in the LLP and the company is deemed dissolved (para 6).
- The notice of conversion must appear on correspondence for twelve months (para 15).
- The Third Schedule has no paragraph on continuing personal liability, unlike the Second.
Read next
- Sections 56–57: conversion of private and unlisted public companies
- Fourth Schedule: conversion of an unlisted public company into an LLP
- Form 18 Under Sections 56 and 57: Company Conversion Into an LLP
- Conversion of Private Company to LLP
Disclaimer: Based on the Limited Liability Partnership Act, 2008 as amended by the Limited Liability Partnership (Amendment) Act, 2021, as consulted on 1 October 2026. Forms, fees and procedure are set by the LLP Rules, 2009 as amended from time to time. This article is general information, not legal advice; check the official text before acting.