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Company Conversion in India: Complete Process, Types, and Legal Requirements


❊ What is Company Conversion?

Company conversion refers to the process of legally changing the structure or type of an existing business entity into another form as per the provisions of the Companies Act, 2013 and other applicable laws. This is done to enjoy operational, tax, or regulatory advantages that suit the business’s evolving needs.

For example: A Private Limited Company may convert into a Limited Liability Partnership (LLP), or a One Person Company (OPC) may convert into a Private Limited Company when it surpasses certain thresholds.

❊ Why Do Businesses Convert Their Company Type?

Businesses opt for company conversion for several reasons:

  • To access more flexible compliance requirements
  • To save on taxes or reduce operational costs
  • To expand business eligibility for contracts, tenders, or funding
  • To limit liabilities or offer ownership flexibility
  • To meet legal thresholds (like turnover or capital limits for OPCs)

❊ Types of Company Conversions in India

Conversion Type Applicable Law
Private Limited to LLP Companies Act, 2013 and LLP Act, 2008
OPC to Private Limited Company Companies Act, 2013
Private Limited to Public Limited Company Companies Act, 2013
Partnership Firm to LLP LLP Act, 2008
Sole Proprietorship to Private Limited/LLP As per registration provisions
LLP to Private Limited Company Subject to legal conditions

❊ Benefits of Company Conversion

  • Operational flexibility with fewer compliance norms (in case of LLP)
  • Tax advantages depending on entity type number
  • Limited liability protection for owners
  • Eligibility for capital raising, tenders, and government contracts use
  • Simplified exit or restructuring options
  • Legal recognition and continuity

❊ Documents Required for Company Conversion

  • Board resolution or partners’ approval
  • Copy of latest Memorandum and Articles of Association (MOA/AOA)
  • Updated financial statements
  • Consent of shareholders/partners
  • Digital Signature Certificates (DSC) of directors/partners
  • Income Tax clearance certificate (if applicable)
  • NOC from creditors and other authorities
  • Conversion application and relevant government forms
  • LLP agreement (for conversion into LLP)

❊ Process of Company Conversion in India

    Step 1: Hold Board/Partner’s Meeting
  • Pass a resolution approving the conversion and authorizing filing of necessary documents.

    • Step 2: Name Approval (if required)
  • Apply for name reservation through RUN (Reserve Unique Name) service.

    • Step 3: File Conversion Application
  • Submit prescribed forms (like Form URC-1, INC-6, LLP-2, LLP-3) with ROC along with required attachments.

    • Step 4: Pay Government Fees
  • Pay applicable MCA fees and stamp duties.

    • Step 5: Obtain Fresh Incorporation/Registration Certificate
  • Receive the conversion certificate confirming the new company structure.

    • Step 6: Update Business Registrations
  • Modify PAN, TAN, GST, Shops & Establishment, and other licenses to reflect the converted entity’s new status.

❊ Compliance After Conversion

Post-conversion, the entity must:

  • Issue a public notice in newspapers (in some cases)
  • Intimate banks, vendors, and clients about the conversion
  • Update tax and statutory registrations
  • File fresh annual returns and maintain compliance as per the new entity type

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(FAQs) on Company Conversion

It’s a legal process where an existing business entity changes its type (e.g., Private Limited to LLP) to suit operational and regulatory needs.

Yes — under the Companies Act, 2013 and LLP Act, 2008, subject to legal conditions.

When its paid-up capital exceeds ₹50 lakh or annual turnover exceeds ₹2 crore.

Yes — under the LLP Act, 2008, with partner and creditor approval.

Lower compliance costs, tax advantages, and operational flexibility.

Yes — by altering its Articles of Association and obtaining ROC approval.

Yes — both must be updated with the new entity name and structure.

Yes — they remain enforceable unless stated otherwise in the agreement.

Around 20-30 working days, depending on document readiness and ROC processing.

Yes — for all directors, partners, and authorized signatories.

Yes — though subject to strict conditions and regulatory approvals.

Yes — shareholders/partners must approve the conversion via resolution.

A form used for converting an unregistered company or firm into a company limited by shares.

Yes — all assets and liabilities automatically vest with the converted entity.

In certain conversions (like LLP to company), public notice in newspapers is mandatory.

Yes — you must file taxes under the new entity’s PAN and status post-conversion.

Yes — for example, companies with unsecured loans or legal disputes may face restrictions.

Stamp duty may apply on transfer of assets or capital depending on state laws.

Yes — through a fresh company incorporation, subject to compliance.

Yes — Registrar of Companies (ROC) approval is mandatory for all conversions.
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