Many entrepreneurs start their journey in India as an LLP (Limited Liability Partnership). It’s uncomplicated, flexible, and easy to manage in the early stages. But as the business develops, many companies will feel the need to raise funds, build investor confidence, or scale the business. That’s when converting an LLP into a Private Limited Company becomes the right step.

In this article, we’ll walk you through the process in simple words, without legal jargon, so you clearly understand why and how to do it.

Why should you convert an LLP to a Private Limited Company?

1. Attracting investors – Investors prefer putting money in a private limited company because of better compliance, structured shareholding, and transparency.

2. Better credibility – A private limited company enjoys higher brand value in the eyes of banks, vendors, and clients.

3. Easier fundraising & ESOPs – If you plan to give shares to employees or raise VC funding, private limited is the way.

4. Growth & expansion – Many bigger contracts, especially government or corporate tenders, require private limited status.

Conditions before conversion

Before you start the process, make sure:

• Your LLP has at least 2 partners.

• The partners agree on conversion (majority consent is required).

• Your LLP has proper financial statements and up-to-date compliance records.

• Name approval for the new private limited company is available on the MCA (Ministry of Corporate Affairs) portal.

Step-by-step process to convert LLP into a Private Limited Company

Step 1: Get Digital Signatures (DSC)

All directors of the proposed private limited company must have a valid DSC. This is used to sign electronic forms on the MCA website.

Step 2: Apply for Director Identification Number (DIN)

If the LLP partners don’t already have a DIN, they need to apply for it.

Step 3: Reserve a name

You need to apply for a unique name for your private limited company through the RUN (Reserve Unique Name) service on the MCA portal. The name should ideally be similar to your existing LLP name for easy brand continuity.

Step 4: Draft documents

Prepare the following:

• MoA (Memorandum of Association) – the charter of your new company.

• AoA (Articles of Association) – rules of internal management.

• Statement of conversion from LLP to a company.

• Consent of all partners.

Step 5: File the conversion form with MCA

File Form URC-1 along with necessary attachments like MoA, AoA, partners’ consent, LLP agreement, incorporation certificate of LLP, financial statements, etc.

Step 6: Apply for incorporation

File SPICe+ (INC-32) form for incorporation of the private limited company. This includes PAN and TAN applications as well.

Step 7: Get Certificate of Incorporation

Once the MCA verifies everything, you’ll get a Certificate of Incorporation. From that date, your LLP officially becomes a Private Limited Company.

Documents required

• LLP agreement and incorporation certificate

• Latest financial statements of LLP

• Consent letters from partners

• MoA & AoA

• Identity and address proof of directors

• Proof of registered office

Things to keep in mind after conversion

• The LLP will be considered dissolved once the conversion is done.

• All assets, liabilities, rights, and obligations of the LLP automatically transfer to the private limited company.

• Inform banks, vendors, and clients about the new company structure.

• Update GST, PF, ESIC, and other registrations accordingly.

Final thoughts

Changing an LLP into a Private Limited Company is a significant decision, but it can unlock a wealth of growth opportunities for your business. The process may seem somewhat technical; however, with the correct professional support, it becomes smooth.

At IndusEntry, we provide startups and growing businesses with end-to-end assistance – from verifying eligibility to filing all necessary documents with the MCA – so you can focus on scaling your business while we handle the compliances.