# Convert LLP to Private Limited Company

> An LLP converts into a private limited company by registering under Section 366 of the Companies Act, filing Form URC-1 and SPICe+ after partner approval and a public advertisement. Its assets, liabilities and contracts carry over by law. Founders usually do this to raise equity or issue ESOPs, which an LLP can't do. The Income-tax Act has no express exemption for this direction, so the tax position has to be checked before converting.

Practice: Conversions, Changes & Closure — https://www.industax.com/services/business-changes/

Venture investors and ESOP plans need shares, and an LLP has only partner contributions. Converting before a funding round is common; doing it a few months ahead avoids a rushed closing.

We review the LLP's books, settle partner capital accounts into share capital, check whether any partner is being paid more than their capital balance (which can trigger tax), and plan the migration of GST, bank accounts and contracts.

## Key facts

| Item | Detail |
| --- | --- |
| Law | Section 366, Companies Act 2013 |
| Forms | URC-1 + SPICe+ |
| Approval | Majority of partners; public advertisement |
| Tax | No specific exemption — examine before converting |
| Reason to convert | Equity funding, ESOPs, investor preference |

## Who needs this

- LLPs preparing for a seed or Series A round
- LLPs planning ESOPs for employees
- Businesses whose customers prefer a company

## What's included

- Tax and accounting review before conversion
- Partner resolutions and advertisement
- URC-1 and SPICe+ filing
- Cap table and registration migration

## Documents

- LLP agreement and certificate of incorporation
- Latest financial statements and Form 8
- Partners' consent and KYC
- Creditor NOCs where needed

## Process

1. **Review** — Accounts, capital and tax position checked.
2. **File** — URC-1 and SPICe+ submitted after advertisement.
3. **Launch** — Shares issued; cap table ready for investors.

## FAQs

### Why can't an LLP raise venture capital?

Most venture funds invest by subscribing to equity or preference shares, and many fund documents don't allow investing in LLPs. LLPs also can't issue ESOPs. Converting to a company solves both.

### Will the company inherit the LLP's registrations?

Its assets, liabilities and contracts vest by law, but tax and regulatory registrations such as PAN, GSTIN and licences are issued afresh in the company's name.

### How long does LLP to company conversion take?

Usually four to eight weeks, including the advertisement period and the Registrar's processing, provided the LLP's annual filings are up to date.

## Official sources

- Ministry of Corporate Affairs — MCA21 portal: https://www.mca.gov.in/
- Income Tax e-Filing portal: https://www.incometax.gov.in/

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Canonical page: https://www.industax.com/services/business-changes/llp-to-private-limited-conversion
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.