Conversion of Limited Liability Partnership (LLP) into Private Limited Company in Kolkata, West Bengal

Earlier there was no such provision in the Companies Act, 2013 for converting a Limited Liability Partnership (LLP) into a private limited company in Kolkata, West Bengal. Then a notification was passed which was known as “the Companies Authorized to register Amendment Rules, 2016” by the Ministry of Home Affairs on 31st May 2016 which states that a Limited Liability Partnership (LLP) can be converted into a Private limited Company in Kolkata, West Bengal.

Benefits of converting a Limited Liability Partnership (LLP) into a Private Limited Company in Kolkata, West Bengal

Followings are the various benefits which a private limited company enjoys after getting converted from LLP:

1. Maintain the Brand Value: When the LLP gets converted into a Private limited company in Kolkata, West Bengal, the existence of the company is continued, and the private limited company does not have to spend extra money on building its image in the market.
2. Unabsorbed losses and depreciation is carried forward: Since the depreciation and losses occurred in the Limited Liability Partnership (LLP) is carried forward after the conversion into a private limited company, the company does not have to spend extra money on accounts and book-keeping for the same.
3. Facility of Employee Stock Option Plan (ESOP) to the employees: Once the Limited Liability Partnership (LLP) is converted into a private limited company in Kolkata, West Bengal, it provides facility to the companies to provide ESOP and stock ownership plan to their employees. These kinds of plans help the company to attract the efficient employees as it acts as an incentive plan for them and gives them benefits for working in the company.
4. Helps in raising funds: The conversion process for a private limited company is very tiring but it helps the company to gain more credibility in the market of Kolkata, West Bengal which facilitates the company to raise the funds easily.
5. Facility of Foreign direct investment (FDI): Limited Liability Partnership (LLP) must get approval from the government officials in Kolkata, West Bengal for receiving FDI whereas private limited company does require any permission for receiving it.

Limited Liability Partnership (LLP) into Private Limited Company in Kolkata, West Bengal

West Bengal is the state with second largest number of MSMEs that accounts for more than 14% of India’a total count of MSMEs. The state of West Bengal is situated on the eastern part of the country surrounded by Bay of Bengal on one side and international border with Nepal, Bhutan and Bangladesh on other. On the interior side t share its border with Jharkhand, Odisha, Sikkim and Assam. The State has huge network of road and rail network covering more than 300,000 Kms with 16 national highways and 2 Asian Highways. Even the railways has 4000 kms of tracks along with second largest metro network in the India.

The State of West Bengal enjoys the natural maritime and navigable waterways with 950 Kms of coastline. Two major ports i.e Kolkata and Haldia along with deep sea port of Tajpur establishes the connectivity with South east Asia. It has two International Airports at Kolkata and Bagdogra apart from one private airport ar West Bardhhaman. West Bengal has been a leading producer of Paddy and Tea in lndia.

Not only this, as per the latest report by World Bank, West Bengal ranked 9th out of 36 states in terms of ease of doing business. 

Pre requisites for converting a Limited Liability Partnership (LLP) into a private limited company in Kolkata, West Bengal

1. Least number of partners: Earlier Limited Liability Partnership (LLP) must have a minimum of 7 partners for converting it into a private limited company in Kolkata, West Bengal. But after the amendment of “the Companies (Authorised to register) Rules, 2014” it was reduced to a minimum of 2 partners in Kolkata, West Bengal. This rule came into effect from 15th August 2018.
2. Advertisement in newspaper: The Limited Liability Partnership (LLP) must broadcast an advertisement of the form “URC-2” in the English and in the local language newspaper of Kolkata, West Bengal in which LLP is incorporated. The purpose of the advertisement is to check whether any objections are there or not for the LLP and if something is there it shall be reported within 21days from the date of advertisement.
3. Asset revaluation: Limited Liability Partnership (LLP) cannot perform the procedure of asset revaluation in the past 1 year from the date when application is done for converting it into a private limited company.
4. No Objection Certificate from the Registrar of the Companies: LLP needs to notify the respective Registrar of Companies (ROC) under which its registration is done. Authorised ROC needs to issue a NO Objection Certificate (NOC) to the LLP for converting it into a private limited company. Any objections there related to conversion, ROC needs to inform the same to the Limited Liability Partnership (LLP) within 21 days from the date of notification. If ROC fails to submit any objections in the required format, then it is assumed that there is no objection from ROC.
5. Declarations: All the designated partners of the LLP need to give a declaration for converting the Limited Liability Partnership (LLP) into a private limited company in Kolkata, West Bengal which shall be printed on a stamp paper. Brief details regarding the law suit or legal proceeding if any going on against the LLP with any government authority or in any court, it needs to be submitted with the ROC.
6. Filing of Annual returns: Limited Liability Partnership (LLP) needs to file all the required returns like Annual returns and submit forms like “Form 8” and “Form 11” with the ROC to complete the process of converting LLP into a private limited company.

Procedure of converting Limited Liability Partnership (LLP) into a Private limited company in Kolkata, West Bengal.

Process of conversion of a Limited Liability Partnership (LLP) in Kolkata, West Bengal is a simple and easy process. There are various advantages of transforming a Limited Liability Partnership (LLP) into a Private Limited company in Kolkata, West Bengal. The company is widely known after conversion and gains reputation legally. Also, companies obtain access to get listed on the stock exchanges in India.

1. Approval from all the Partners: Meeting should be held to take approval from all the partners of the Limited Liability Partnership in Kolkata, West Bengal to register it under Section 366 of the Companies Act, 2013. In this meeting, one or more partners are authorised to conduct all the activities required for conversion of an LLP into a private limited company.
2. Apply for Name approval: Approval of the name for the company must be taken from the Registrar of Companies (ROC). RUN (Reserve Unique Name) form needs to be submitted with all the required details in the e -format. For the new company, the validity of the name which is approved by the ROC is valid only for 20days.
3. Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN): It is mandatory for all the partners to have a DSC and DIN who will become the directors of the company after its conversion. Designated partners can use their DPIN which they already have as DIN in the private company. The applicants need to submit a true copy of identity proof, address proof of Kolkata, West Bengal, and one passport size photograph along with the application form. Applicants can also directly apply for DIN by filling incorporation forms available on the Ministry of Corporate Affairs portal.
4. Advertisement article in Newspaper: Limited Liability Partnership (LLP) has to publish an article in the English newspaper and in the local vernacular language of Kolkata, West Bengal in which it is located regarding the conversion of the LLP into a Private limited company in the format which is given in Form URC- 2. This is done to seek if there are any objections regarding the conversion to anyone. If anyone has any objections, then it must be reported within 21days of the advertisement and all the objections should be addressed by the Limited Liability Partnership (LLP).
5. Form URC-1 filing: After the name is approved by the ROC, applicant needs to fill the Form URC- 1 with the Registrar of the Companies along with the following details:
   • A list of all the members along with their names, occupation, address, and shares held by them.
   • Details of all the first directors such as name, DIN, passport number and its expiry date of the private limited company.
   • All the first directors need to provide an affidavit which states that the person is not prohibited from becoming a director of a company under sub- section (1) of Section 164 of the Companies Act, 2013 and all the details provided by them are true and accurate.
   • List of all the partners with their names and address along with the copy of agreement of the Limited Liability Partnership (LLP) and registration certificate which needs to be signed and verified by a minimum of 2 designated partners of the LLP.
   • A as on date statement of assets and liabilities of the Limited Liability Partnership (LLP) must be prepared within 15days prior to filing of Form URC-1 and must be certified by a practicing Chartered Accountant.
   • The latest income tax return copy of the Limited Liability Partnership (LLP).
   • The directors must submit an undertaking stating that they will adhere to the requirements of the Indian Stamp Act, 1899.
   • Limited Liability Partnership (LLP) must have written consent from all the secured creditors or “NO Objection Certificate”.
   • Majority of the members should have given written consent.
   • Copy of newspaper article which is published 21 days prior to filing to seek if there are any objections regarding conversion from the public.
   • Attach six days prior and not more than that from the date of filing an application statements of accounts which should be duly authorised and certified by an auditor.
   • A statement containing the following information:
     1. Number of equity shares and sum total amount of share capital of the company.
     2. The company’s name with the word “Private limited” or “limited” whichever is applicable.
6. E -form Agile, SPICe +, INC 33 and INC 34: Along with form URC-1, forms like SPICe +, INC 33, Agile and INC 34 needs to be filed to complete the process of conversion.
   • • SPICe (Simplified Proforma for incorporating a Company Electronically) plus: This form is filled for incorporation of a company. In this form, fundamental details of the directors and the company together with PAN/ TAN details are filled.
       1. The first directors have to submit their address proof and identity proof along with the DIR 2 declaration.
       2. NOC from the property owner of the office premise along with rent agreement and utility bill as a proof of registered office address.
     • Prepare Memorandum of Association (MOA) and Article of Association (AOA): Once the applicant has filed SPICe form, e form INC-34 (AOA) and form INC-33 (MOA) has to be filled online from the Ministry of Corporate Affairs (MCA) portal. Shareholding and subscribers’ details have to be added in MOA and changes have to be done in ancillary objects and main objects of the MOA. As per the rules of the Companies Act, 2013 changes have to be done in AOA as per the needs of the company.
     • Agile E- form: It is one platform for all the filing requirements which earlier required various routes. This form helps the below requirements:
       1. 1. Provident Fund/ Employee State Insurance registration
          2. GST Number
          3. Bank Account opening
          4. If the incorporation is in Maharashtra, it helps in Registration of Professional Tax

   All the above forms are needed to be filled through the MCA portal along with the required fees

7. Incorporation Certificate: After checking and verifying all the documents, the Registrar issues the certificate of Incorporation which has details of Corporate Identity Number (CIN), TAN and PAN.