When the startup’s product is well-received by the market, focus is then on to scale up rapidly. For this, founders may approach investors to raise funds. Investors invest against various securities like equity shares, preference shares, debentures, etc. These securities cannot be issued by an LLP. Therefore, a business operating as LLP must be converted into a private limited company.
The process begins by obtaining the consent of all the partners in the form of resolution by conducting a meeting. Authorization must be given to required partners for executing the steps papers, deeds, and documents required for registration.
STEP 1: Newspaper Advertisement
The LLP shall publish a notice seeking objections for conversion of LLP into company in form URC-2. Such notice shall be published in atleast 2 newspapers one in local language wherein registered office is situated and another in english language newspaper.
The advertisement copy shall be served to the Registrar where the LLP is registered.
STEP 2: Name approval
LLP have to apply for name availability through Part A of Spice+ Form. The business can be run without the name change, except the addition of word ‘private limited’ in place of word ‘LLP’.
STEP 3: Form filing – URC-1, SPICE+, INC-33, INC-34 and Agile form.
A. E-form URC-1: Application by company for registration under Section 366
Attachments with form:
- Publication of advertisement seeking public objections at least 21 days before filing form.
- Written consent of majority of partners.
- Written consent/ no objection certificate from all secured creditors.
- List showing the names, address and occupation of the persons named as members with details of shares held by them, if any
- List showing the first directors of Company along with their particulars.
- Copy of LLP agreement and Incorporation Certificate
- Statement of assets and liabilities of LLP along with certification of chartered accountant in practice, dated not earlier than 15 days of filing form no. URC-1 along with the financials of previous year.
- Copy of latest income tax return of LLP
- Undertaking of proposed directors signifying the oath of compliance with requirements of Indian stamp Act, 1899
- Certificate from a CA/CS/CWA certifying the compliance with all the provisions of Stamp Act, to the extent applicable
B. E –form Spice+/INC-33/INC-34 and Agile are to be filed as required in normal course procedure of incorporation of the company.
Attachments with forms:
- Online preparation of INC-33 (MOA) and INC-34 (AOA).
- Consent & Declaration by first Directors in form DIR-2;
- Self-Declaration by first directors and subscribers in form INC-9;
- ID Proof and Address Proof of Directors;
- Resolution of Partners for conversion of LLP into Company;
- Proof of regd. Office like Rent Agreement/Sale deed
- Latest Electricity bill (Not older than 2 Months)
- NOC of Owner of Office, If Regd office is rented.
Step 5: Certificate of incorporation
The Registrar on being satisfied will issue Incorporation certificate.
For any queries, comments or professional assistance feel free to reach us at hitarth.sheth@bhaskara.in.
Disclaimer: This article is for the purpose of general awareness and does not represent professional opinion of the author.