Company Conversions

(Transforming legal identity to suit evolving business needs)

Overview

Company conversion refers to the legal process of changing the structure or form of an existing business entity into another, such as converting an LLP into a Private Limited Company, an OPC into a Public Company, or a Partnership Firm into a Company. These conversions are often triggered by business growth, investor requirements, statutory thresholds, or long-term strategic goals.

In India, various conversion mechanisms are facilitated by the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013 and the LLP Act, 2008. Each type of conversion has distinct eligibility, procedural, and documentation requirements.

Conversions allow businesses to adapt to regulatory, financial, and market realities while retaining continuity of operations, tax identity, and contractual relationships.

Key Benefits

·       Scalability & Growth Readiness: Enables transition to a more robust structure that supports expansion, investor participation, or IPO readiness.

·       Limited Liability Protection: Converts traditional entities like partnership or proprietorship into limited liability formats.

·       Legal Continuity: Assets, liabilities, and contracts seamlessly transfer without disrupting operations.

·       Access to Capital: Private or public limited structures allow equity infusion and institutional funding.

·       Tax and Regulatory Compliance: Adapts business structure in line with regulatory thresholds (e.g., turnover or capital limits for OPC).

·       Enhanced Credibility: Companies (especially private/public limited) enjoy greater market trust, tender eligibility, and creditworthiness.

Applicable Laws & Regulatory Framework

The legal and procedural framework for conversions includes:

·       Companies Act, 2013

·       Limited Liability Partnership Act, 2008

·       Partnership Act, 1932 (for conversions from partnership firms)

·       Income Tax Act, 1961 – for continuity of PAN, taxation status, and exemptions

·       FEMA Regulations – for foreign investment or cross-border implications

·       Registrar of Companies (ROC) notifications and procedural circulars

Types of Conversions We Handle

1.     LLP to Private Limited Company

2.     LLP to Public Limited Company

3.     OPC (One Person Company) to Private/Public Limited Company

4.     Private Limited Company to Public Limited Company and vice versa

5.     Partnership Firm to LLP / Private Limited / Public Company

6.     Sole Proprietorship to LLP / Company

7.     Section 8 Company to Private or Public Company (upon revocation of license)

Eligibility / Ideal For

Conversion is ideal for:

·       Businesses crossing statutory limits (e.g., OPC crossing ₹2 crore turnover)

·       Firms planning to raise equity or venture capital

·       Partnerships seeking limited liability protection

·       Entities aiming to enter regulated sectors or public tenders

·       Startups transitioning to scalable and investor-ready formats

Each conversion type has its own eligibility (e.g., for LLP to Company, there must be at least 2 designated partners who will become directors).

Procedure (Generic Workflow; specifics may vary)

1.     Board or Partner Consent

Pass a resolution approving the conversion and authorizing representatives to file necessary forms.

2.     Name Availability Check

Apply for name approval via RUN or SPICe+ on MCA portal (if required).

3.     Drafting of Incorporation / Conversion Documents

Prepare MOA, AOA, affidavits, declarations, conversion statements, and partnership/LLP agreements.

4.     Filing of E-Forms

Submit prescribed e-forms such as INC-32 (SPICe+), URC-1, INC-8, and others along with required attachments on MCA portal.

5.     ROC Verification and Approval

Registrar of Companies verifies the documents and issues Certificate of Incorporation (COI) for the new entity.

6.     Intimation to Other Authorities

Update PAN, GST, bank accounts, and regulatory licenses under the new name and structure.

7.     Post-Conversion Compliance

Amend internal records, share certificates, registers, and initiate fresh statutory compliances under the new entity type.

Timelines

Conversion timelines generally range between 30 to 60 days, depending on:

·       Type of conversion and ROC jurisdiction

·       Readiness of documentation and clearances

·       Complexity of legal structure or outstanding liabilities

·       Name approval timelines or objections (if any)

How LTC Helps

Law to Corporate offers complete assistance in company conversions, ensuring seamless  legal and operational transition:

·       Advisory on choosing the right structure and assessing eligibility

·       Drafting of resolutions, declarations, MOA/AOA, and conversion statements

·       Filing of SPICe+, URC-1, INC-9, and other relevant forms with MCA

·       Obtaining fresh COI and managing post-conversion statutory updates

·       Coordinating with banks, tax departments, and license issuers

·       Ensuring full legal continuity and compliance under the new entity