Convert LLP
to Private
Limited Company
Upgrade your LLP to a Private Limited Company — attract investors, issue ESOPs, raise equity funding, and access a wider corporate governance framework. CA/CS-managed end-to-end conversion under Section 366 of the Companies Act, 2013 — name reservation, URC-1, SPICe+, MOA, AOA, and complete post-conversion transition.
6 Key Reasons LLPs Convert to Private Limited
Raise Equity Funding
Venture capitalists, angel investors, and PE funds invest in companies with share capital — not LLPs. Conversion enables equity fundraising, SAFE notes, convertible instruments, and formal term sheets.
Issue ESOPs to Employees
Employee Stock Option Plans (ESOPs) are available only to companies. LLPs cannot issue ESOPs. Conversion enables retention of key talent through stock-based compensation.
Better Credit Access
Banks and NBFCs are more comfortable extending working capital, term loans, and credit limits to Private Limited companies than LLPs — given the structured shareholding and annual filing discipline.
International Operations
Foreign direct investment (FDI), overseas incorporation, opening foreign bank accounts, and international payment processors all work more smoothly for Pvt Ltd companies than LLPs.
Corporate Credibility
"Private Limited" signals institutional credibility in enterprise B2B sales, government tenders, and large corporate procurement. Many enterprise clients insist on Pvt Ltd vendors for long-term contracts.
Scale Without Consent Bottleneck
Pvt Ltd allows onboarding investors and shareholders without unanimous partner consent. Share transfers, rights issues, and ESOPs are governed by board resolutions — much faster than LLP amendments.
Conversion vs Fresh Incorporation — Why Not Just Start a New Company?
Starting a fresh Pvt Ltd company separately is simpler — but you lose everything tied to the LLP: existing contracts, assets, bank relationships, licences (GST, MSME, IEC, FSSAI — which must be re-applied), credit history, and ongoing legal proceedings. Conversion under Section 366 preserves the LLP's business continuity — all contracts, assets, liabilities, licences, and legal proceedings vest in the new company automatically by operation of law, without novation or re-assignment. For an LLP with active operations, conversion is almost always better than fresh incorporation.
How TaxClue Converts Your LLP to Private Limited
The conversion involves both MCA (for the new company registration) and a parallel LLP closure on the ROC LLP side. TaxClue manages both simultaneously — one CA/CS team co-ordinating the complete conversion.
Day 1–5Pre-Conversion Assessment & Structuring
TaxClue reviews the LLP's MCA status (pending filings, charges, DIN status), current LLP Agreement, partner/contribution details, and financials. The proposed shareholding structure of the new Pvt Ltd — share capital, allocation to each partner, and director designations — is agreed. Tax neutrality conditions under Section 47(xiiib) are verified and structured into the conversion plan.
Week 1–2Reserve Company Name — MCA RUN
TaxClue searches for and reserves an available company name via MCA's RUN (Reserve Unique Name) facility. The proposed name must end "Private Limited", must not conflict with existing companies or trademarks, and must be distinctive. TaxClue pre-screens multiple name options before filing RUN to minimise rejection risk. The approved name is reserved for 20 days.
Week 2–4Obtain All Partners' Written Consent & Pass Resolution
All partners of the LLP pass a unanimous resolution consenting to conversion into a Private Limited Company. TaxClue drafts the resolution in the form required under Rule 37 of the Companies (Authorised to Register) Rules, 2014 — specifying the proposed company name, share capital structure, proposed directors, and the terms of conversion. All partners sign.
Week 3–5Publish Advertisement in Newspaper
A notice of the proposed conversion is published in a newspaper in the district where the LLP's registered office is situated — giving any creditor or interested party the opportunity to object. The newspaper advertisement is a mandatory statutory requirement under Rule 37(1)(b). TaxClue co-ordinates newspaper publication and collects the advertisement copy for attachment to URC-1.
Week 4–5Draft MOA, AOA & Other Incorporation Documents
TaxClue's CS drafts: (i) Memorandum of Association (MOA) — objects clause, liability clause, capital clause; (ii) Articles of Association (AOA) — governance, board powers, share transfer restrictions; (iii) declaration under Section 366(1) — certifying partner consent and conversion compliance. All documents are tailored to the new company's business objectives and shareholder structure.
Week 5–7File Form URC-1 on MCA V3
Form URC-1 (Application by a Company for Registration under Part I of Chapter XXI) is filed on MCA V3 with all mandatory attachments: partner consent resolution, newspaper advertisement copy, list of partners with proposed shareholding, LLP Agreement, LLP's latest audited financial statements (Form 8), LLP's annual return (Form 11), declaration of solvency, and the statement of assets and liabilities. URC-1 is signed with DSCs of the proposed directors.
Week 6–8File SPICe+ (INC-32) — New Company Incorporation
Simultaneously with or after URC-1 approval, TaxClue files SPICe+ (INC-32) — the integrated incorporation form for the new Private Limited Company. SPICe+ covers: company name approval, DIN application for new directors (if needed), PAN and TAN application, ESIC/EPFO registration, bank account opening linkage, and GST registration application. The Registrar of Companies issues the Certificate of Incorporation (CoI) with the new CIN.
Month 3–5Registrar Review, CoI Issuance & LLP Closure
The Registrar of Companies reviews URC-1 and SPICe+. On satisfaction, the CoI of the new Private Limited Company is issued. The LLPIN of the old LLP is simultaneously closed — MCA records the LLP as "Converted". The new company receives its CIN, PAN, TAN, and bank account details. All assets, liabilities, contracts, and legal proceedings of the LLP vest automatically in the new company by operation of law.
Post-ConversionPost-Conversion Updates — GST, Bank, Licences, Contracts
TaxClue manages all post-conversion compliance: GST amendment (if same state) or new registration (if required), bank account transition (notify bank of conversion, update account name and mandate), MSME/IEC/FSSAI/drug licence amendments, issue share certificates to new shareholders, hold first board meeting, file Form MGT-14 (if applicable), update IT portal PAN records, and notify major counterparties of the change in entity type.
What Changes After Conversion?
| Feature | LLP (Before) | Private Limited (After) |
|---|---|---|
| Governing Law | LLP Act, 2008 | Companies Act, 2013 |
| Governing Document | LLP Agreement | MOA + AOA |
| Identity Number | LLPIN | CIN (new — issued on conversion) |
| Owners Called | Partners | Shareholders |
| Management Called | Designated Partners | Board of Directors |
| Equity Fundraising | Not possible — no share capital | Full equity funding, SAFE, convertibles |
| ESOPs | Not available | Available — ESOP pool, vesting schedule |
| FDI via Automatic Route | Restricted sectors | Permitted in most sectors |
| Annual Filings | Form 8 + Form 11 | AOC-4 + MGT-7 + DIR-3 KYC (more filings) |
| Tax Rate (Domestic) | 30% + surcharge on profits | 22% + surcharge (Section 115BAA) |
Lower Tax Rate After Conversion — 22% vs 30%
One often-overlooked benefit: LLPs pay tax at 30% (plus surcharge and cess) on their profits. A Private Limited Company that opts for the new tax regime under Section 115BAA pays only 22% (plus 10% surcharge and 4% cess = effective rate ~25.17%). For an LLP with ₹1 crore in profits, conversion could save ₹5–8 lakh annually in income tax — making the conversion cost recoup within the first year for many LLPs.
LLP to Pvt Ltd Conversion — Common Questions
Convert Your LLP to Private Limited — Section 366
TaxClue manages the complete LLP to Pvt Ltd conversion — pre-conversion tax structuring, partner consent, newspaper advertisement, URC-1, SPICe+, MOA/AOA, and all post-conversion GST, bank, and licence updates.
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