Company to LLP conversion is the statutory route by which an existing company is wound into a Limited Liability Partnership while its assets, liabilities and business continue in the LLP. It is governed by Section 56 and the Third Schedule of the Limited Liability Partnership Act, 2008, and is done on the MCA portal through the FiLLiP form and Form 18. It suits owner-managed private companies that want lighter compliance, but it is a one-way structural change with tax and contractual consequences that need to be checked first.
What is company to LLP conversion?
A company and an LLP are different legal forms. The Companies Act, 2013 does not contain a route to turn a company directly into an LLP. The route sits in the LLP Act, 2008: Section 56 and the Third Schedule allow a firm, a private company or an unlisted public company to convert into an LLP, subject to conditions. Once converted, the company is dissolved and its registration in the company register is removed, while the LLP takes over all its property, rights, liabilities and obligations.
In practice the application is made on the MCA V3 portal. You reserve a name for the LLP, file the LLP incorporation form (FiLLiP) using the conversion option, have the proposed partners give consent in Form 9, and then file Form 18, the actual application for conversion, with financial and creditor details. If the Registrar is satisfied, the Registrar issues a certificate of registration on conversion in Form 19, and the LLP agreement is then filed within thirty days.
Conversion is not a sale, so there is no transfer of contracts by assignment, but licences, registrations, bank accounts, GST, PF, ESIC and property records must still be updated in the name of the LLP. Tax treatment depends on meeting conditions of the Income-tax Act; if they are not met, the conversion can trigger capital gains tax.
Because the change cannot easily be reversed, owners should check the commercial reasons before filing. LLPs have lower regulatory burden than companies, but they cannot issue equity to investors in the way a company can, so conversion is generally for stable, closely held businesses rather than venture-backed start-ups.
Who should consider converting a company into an LLP?
Conversion is a choice, not an obligation. It is usually considered by:
- Family-owned or professionally run private companies with a small group of owner-partners
- Companies with modest turnover that want to avoid audit-heavy, board-meeting-heavy compliance
- Businesses that have stopped raising equity and do not plan to issue shares to investors
- Consulting, trading and service businesses that want pass-through style partnership taxation and fixed LLP compliance
- Companies where the promoters want to simplify exit or entry of members through the LLP agreement rather than share transfers
- Unlisted public companies that meet the Third Schedule conditions and want to move to an LLP structure
Benefits of Company to LLP Conversion
Lighter annual compliance
An LLP files Form 11 and Form 8 each year rather than the full set of company filings such as board meeting minutes, AGM and AOC-4, which reduces recurring cost.
Limited liability for partners
Partners are liable to the extent of their agreed contribution, except for their own wrongful acts, so the liability protection of a company is retained.
Flexible internal management
The LLP agreement can set profit sharing, roles and decision-making in a way that suits the owners, without the structure imposed by company law.
Continuity of the business
Assets, liabilities, contracts and employees move to the LLP by operation of law, so you do not wind up the business and start again.
Possible tax neutrality
If the conditions of the Income-tax Act are satisfied, the transfer of assets on conversion is not treated as a taxable transfer for capital gains.
Eligibility & conditions for conversion
Section 56 read with the Third Schedule sets conditions that must be satisfied at the time of application. The main ones are:
- The company is a private company or an unlisted public company; listed companies cannot use this route
- No security interest subsists on the company's assets at the time of application, or if one exists, the secured creditor's consent is obtained
- All shareholders of the company become partners of the LLP, and no one else is a partner
- The company has not been formed as a Section 8 company and has share capital
- Pre-filing checks on the MCA portal: no pending e-forms, and at least one financial statement and annual return filed
- The company's financial statements, as per the Third Schedule format, are signed by the directors and auditor and not older than the permitted period before filing
- Where the company is regulated, such as an NBFC, the regulator's approval is obtained first
Documents required
For name reservation and FiLLiP
- Board resolution approving the proposed LLP name and conversion
- PAN, ID and address proof of every proposed partner and designated partner
- DIN or DPIN of designated partners, and a Digital Signature Certificate for each
- Proof of registered office, such as rent agreement and utility bill, with owner's NOC
- Subscriber sheet showing each shareholder's proposed capital and profit share
For Form 18 (conversion application)
- Financial statements of the company in the Third Schedule format, signed by directors and auditor
- List of secured creditors with their consent, or an affidavit that there are none
- Approval of any regulator, where the company is regulated
- Latest income-tax return and auditor's certificate
- Other documents the Registrar may ask for, such as the latest annual return and auditor appointment details
After conversion
- Form 19 certificate of registration on conversion
- LLP agreement filed in Form 3 within 30 days of conversion
- Updated PAN, GST, bank, PF, ESIC and licence records in the name of the LLP
Step-by-step conversion process
The sequence below reflects how conversions are generally filed on MCA V3. Screens and attachment requirements can change, so confirm with the portal at the time of filing.
Check eligibility and tax impact
Confirm that the company is private or unlisted public, that there is no active charge, and that all shareholders will be partners. Check the Income-tax Act conditions with your tax adviser before any filing.
Clear MCA compliance
File any pending annual returns and financial statements and close pending e-forms. The portal will not accept the conversion application on a company with open filings.
Reserve the LLP name
Pass a board resolution and file RUN-LLP to reserve the proposed name. The name must comply with the LLP Rules and should not conflict with existing names or trademarks.
File FiLLiP with the conversion option
Fill the incorporation form for the new LLP, entering partner, capital and registered office details and attaching the documents. Form 9, consent of designated partners, is generated as part of the filing.
File Form 18
File Form 18 with the company's financial statements, creditor details or affidavit, regulator approval where applicable and the tax return. Asset, financial asset and revenue details are asked.
Receive Form 19
If the Registrar is satisfied, Form 19 certificate of conversion is issued and the company stands converted into the LLP with effect from that date.
File the LLP agreement
File the LLP agreement in Form 3 within thirty days of conversion, setting out partners, contributions and profit shares.
Update all registrations
Inform the income-tax department, GST, banks, PF, ESIC, trademark office and licensing authorities and update contracts, letterheads and invoices in the new name.
Government fees
Statutory fees are payable on the MCA forms involved, and they depend on the contribution of the LLP and on the form. Because the fee tables have been revised and we have not verified the current schedule against the official portal for this page, we do not state figures.
Professional charges are quoted separately after reviewing your case. Government fees are paid directly to the authority.
How long does conversion take?
MCA does not fix a processing time for conversion. The work usually takes longer than a fresh LLP registration because the company's filings must be clear, the financial statements must be prepared in the Third Schedule format and the Registrar may raise queries on Form 18. A realistic plan is several weeks from start to Form 19, plus time for post-conversion updates.
| Stage | Typical time |
|---|---|
| Eligibility check and clearing pending MCA filings | Depends on pending items |
| Name reservation and FiLLiP | Subject to MCA approval |
| Form 18 and Registrar review | Subject to Registrar queries |
| LLP agreement after Form 19 | Within 30 days of conversion |
Validity & what continues after conversion
The LLP is a permanent entity and continues until wound up. All assets, liabilities, contracts and proceedings of the company continue in the name of the LLP. The company's previous registration number is replaced by the LLP identification number, so every external record needs to be updated. Keep proof of the conversion date, because the tax conditions run from that date.
Compliance after conversion
- File the LLP agreement in Form 3 within thirty days of the certificate of conversion
- File the annual Statement of Account and Solvency (Form 8) and the Annual Return (Form 11) of the LLP within the due dates
- Keep books of account, and obtain audit where the LLP crosses the prescribed turnover or contribution limits
- Intimate PAN, TAN, GST, PF, ESIC, professional tax and other registrations of the change to LLP
- Update bank accounts, contracts, licences, trademarks and import-export code in the LLP's name
- Keep the shareholding-equals-profit-share condition and other income-tax conditions under watch for the required years
- Maintain DIN KYC for designated partners; see DIR-3 KYC
Private limited company vs LLP
| Point | Private limited company | LLP |
|---|---|---|
| Governing law | Companies Act, 2013 | LLP Act, 2008 |
| Liability of owners | Limited to unpaid share capital | Limited to agreed contribution |
| Raising equity | Can issue shares to investors | No shares; limited ability to bring in equity investors |
| Annual MCA filings | AOC-4 and MGT-7 or 7A, board and general meetings | Form 8 and Form 11 |
| Management rules | Set by the Act and articles | Set largely by the LLP agreement |
| Conversion between them | Company to LLP by Section 56 and Third Schedule | LLP to company has its own route; see LLP to company conversion |
Common mistakes & rejection reasons
Active charges on assets
Conversions are held up when a bank charge is still open on MCA records. Satisfy the charge or obtain the lender's consent before filing.
Pending annual filings
The portal will not accept Form 18 for a company with unfiled financial statements or returns. Clear these first.
Partner list differs from shareholders
Everyone who holds shares must become a partner and no outsider can be added at conversion. Add new partners only after Form 19.
Ignoring tax conditions
If conversion does not satisfy the Income-tax Act conditions, capital gains tax can arise, and later breach of conditions can reverse the exemption. Plan this before filing.
Stale financial statements
The financial statements attached to Form 18 must be recent and in the Third Schedule format, signed by directors and the auditor.
Forgetting post-conversion updates
Many LLPs continue to use the company's GST, bank and licence records, leading to mismatches and notices. Update each registration.
Penalties and consequences
Conversion is voluntary, so there is no penalty for choosing not to convert. The risks arise from errors: a Form 18 filed with incorrect information can be rejected or lead to proceedings under the LLP Act, 2008, and failure to file the LLP agreement within thirty days attracts late fees and penalty under the LLP framework. The exact figures should be confirmed from the Act and rules for your case.
Practitioner tips
- Start with a tax and contract review, not the forms. Check customer and lender contracts for change-of-structure clauses, and run the Income-tax conditions with your CA before the board resolution.
- Ask the bank for a no-objection and update on any charge before you reserve the name. A charge shown open on MCA is the single most common reason for delay.
- Prepare the Third Schedule financial statements early; auditors need time and the statements must be fresh at the point of filing Form 18.
- Do not add or remove partners until Form 19 is issued. Changing the shareholder-partner mapping in the middle of the process invites queries.
- Prepare a post-conversion checklist covering PAN, GST, PF, ESIC, bank, licences and trademarks so that all updates happen in the first month.
How Lawgical Guru helps
Feasibility review
We review whether your company meets the Section 56 conditions, including charges, pending filings and shareholder structure.
Name and FiLLiP filing
We help with name reservation, FiLLiP with the conversion option and the DSCs and consents of partners; see also LLP registration.
Form 18 preparation
We prepare the Form 18 package, coordinate the Third Schedule financials with your auditor and respond to Registrar queries.
LLP agreement
We help draft and file the LLP agreement within the thirty-day window.
Post-conversion updates
We assist with updating GST, PAN, bank and licence records, and with ongoing ROC annual filing for the LLP.
Company to LLP Conversion: frequently asked questions
Can a private limited company be converted into an LLP?
Yes. Section 56 and the Third Schedule of the LLP Act, 2008 allow a private company to convert into an LLP if there is no active security interest on its assets and all shareholders become partners. The application is made through FiLLiP and Form 18 on the MCA portal.
Which form is used for company to LLP conversion?
The conversion uses RUN-LLP for the name, FiLLiP with the conversion option, Form 9 for partner consent and Form 18 for the conversion application. The Registrar issues Form 19 as the certificate, and the LLP agreement is filed in Form 3 within thirty days.
Can a public company convert into an LLP?
The Third Schedule covers unlisted public companies as well as private companies, but listed companies cannot use it. Most conversions in practice involve private companies. If you run an unlisted public company, have the conditions and approvals checked before filing.
Is there a direct conversion route in the Companies Act, 2013?
No. The Companies Act, 2013 does not provide for conversion of a company into an LLP. The route is in the LLP Act, 2008. Form URC-1 is for registering other entities as companies and is not the form used for converting a company into an LLP.
Is company to LLP conversion tax free?
It can be, but only if the Income-tax conditions are satisfied. Under the 1961 Act, Section 47(xiiib) required that turnover not exceed Rs 60 lakh and assets not exceed Rs 5 crore in any of the three preceding years, among other conditions. How the same relief appears under the Income-tax Act, 2025 should be confirmed with your tax adviser.
Do all shareholders have to become partners?
Yes. All shareholders of the company must become partners of the LLP, and no other person can be a partner at the time of conversion. New partners can be admitted after the certificate of conversion is issued, subject to the tax conditions you rely on.
What happens to the company's assets and liabilities?
On conversion, all property, assets, rights, liabilities and obligations of the company vest in the LLP by operation of law. Contracts and employees continue, but you must update registrations and inform counterparties to avoid mismatches in tax, bank and licence records.
Why is a bank charge a problem for conversion?
The Third Schedule requires that no security interest subsists on the company's assets at the time of application, unless the secured creditor consents. An open charge on MCA records therefore blocks filing until it is satisfied or the lender's consent is obtained.
How long does company to LLP conversion take?
MCA does not fix a time. It depends on clearing pending filings, name approval, preparing Third Schedule financial statements and the Registrar's review of Form 18. Plan for several weeks, and a further month for updating registrations and filing the LLP agreement.
Can an LLP be converted back to a company?
There is a separate route for converting an LLP into a company under the Companies Act framework, but it has its own conditions and is not a simple reversal. Think carefully before converting, especially if you may raise equity later.
Reviewed by Satyam Gupta, Company Secretary (CS) & Advocate
8+ years of industry experience. This page was last reviewed on 16 October 2026 against the official sources below. Rules and fees change — confirm on the official portal before you apply.