Public company is one of the popular and well known forms of business structure. Besides Company various other business form is prevalent in India like proprietorship, HUF, Firm, LLP etc. Although when considered from the prospective of legal entity and perpetual succession as a feature of form of business after Company, formation of LLP is considered to be apt. In the current scenario, some businessman already running their business through companies thinks it fit to convert its Company into LLP due to below given reasons: Regulatory authorities are gradually becoming stricter by introducing new corporate governance practice for Companies as compared to private company due to increased stakeholder interest; Increasing penalties and imprisonment for non-compliance of provisions; To retain control over business by few people; Easy management; Reduction of extra compliance as applicable on Companies; Legal Compliance Cost Saving.

1. Conversion of Public Company into LLP
~Development through Tail off ~

2. Form of Business
& reason of
Conversion
Public company is one of the popular and well known forms of business structure. Besides Company
various other business form is prevalent in India like proprietorship, HUF, Firm, LLP etc. Although when
considered from the prospective of legal entity and perpetual succession as a feature of form of business
after Company, formation of LLP is considered to be apt.
In the current scenario, some businessman already running their business through companies thinks it fit
to convert its Company into LLP due to below given reasons:
1. Regulatory authorities are gradually becoming stricter by introducing new corporate governance
practice for Companies as compared to private company due to increased stakeholder interest;
2. Increasing penalties and imprisonment for non-compliance of provisions;
3. To retain control over business by few people;
4. Easy management;
5. Reduction of extra compliance as applicable on Companies;
6. Legal Compliance Cost Saving.
2

3. Public Company Concept
3
A public limited company can be further categorised into unlisted public company and listed public
company. The basic difference between these two categories is that shares of unlisted public are not listed
on any stock exchange whereas listed company’s share are listed on stock exchange, further being listed
compliance of listed companies increase manifold comparative to unlisted public company.
Only unlisted public company is allowed to get converted into LLP by following provisions of LLP Act,
2008.

4. What is Limited
Liability
Partnership
4
A partnership which got registered itself under The LLP Act, 2008 whereby partners intends to carry an
objective clearly mentioned through an agreement known as LLP Agreement. Below given are some
features of LLP as provided under LLP Act, 2008.
1. Status of body corporate: LLP is a body corporate which enjoys status of separate legal entity and
perpetual succession meaning thereby partners of LLP are considered separate from LLP and partners
may come and go but LLP will remains in existence.
2. Designated Partners and Partners: LLP shall have at least two designated partners who are
individuals and at least one should be resident in India, Body corporates can also be members of LLP
then nominee of such body corporates will be considered as designated partner.
3. LLP Agreement: All the mutual rights & liabilities of partners will be governed by LLP agreement
including its objectives, manner of induction and cessation, termination and other important clause.
4. Partner Status: Every Partner of LLP is agent of LLP for the purpose of carrying business of LLP

5. 5
Process to
convert Public
Company into
LLP
Section 57 of Chapter X and Fourth schedule of LLP Act, 2008 mentions the provisions for conversion of Unlisted
Public Company into LLP. public company may apply to convert itself into LLP in accordance with fourth
schedule after following below given procedure:
1. Any director or person authorised by the Board will dispatch a notice to call for Board Meeting. Notice shall be
given as per section 173 of Companies Act, 2013 read with SS 1 on Board Meetings;
2. Conduct Board Meeting and analyse the proposal of conversion of Company to LLP;
3. Post approval, dispatch notices for calling an EGM/ AGM to all the members in accordance with provisions
section 101 of Companies Act,2013 read with SS 2 on General Meetings;
4. Approval of Members through unanimous Resolution at EGM/ AGM for conversion of Company to LLP;
5. File E form MGT-14 to submit special resolution with the ROC;
6. Make an application in Form RUN_LLP with CRC after approval of name reservation for LLP in Form FiLLiP;
7. After approval, file E-form 3 within 30 days for providing information of LLP agreement with CRC;
8. File E Form 18 for application for conversion and filing statement for conversion of a Company into LLP.
9. After approval of incorporation and Form 18, E-form 14, required to be filed within 15 days for intimating the
concern department about conversion of Company into LLP.

6. Condition for
Conversion
6
1. All shareholders of the Company should become partners of LLP and no else cannot be partner at the
time of application.
2. There should be no security interest in its assets subsisting or in force at time of conversion
application.
3. All applicable clearances, approvals and permissions for conversion of the Company into LLP to be
obtained.
4. Consent of all creditors has been obtained.
5. Provision with respect to submission of returns and annual accounts under Companies Act,2013
should be complied.

7. Legal Aspect of
Conversion
7
• After conversion Company shall be deemed to dissolved and removed from the records of the Registrar
of Companies
• All property, asset, liability, interest, rights , privileges, obligations of the Company will be transferred
to the LLP.
• All proceeding pending against the Company will continue against the LLP.
• Any conviction, order, judgment, ruling of any court, tribunal or any other authority in favour or
against the Company may be enforced by or against LLP.
• LLP will be deemed to be a party of any agreement which was entered into by Company initially.
• Every contract of employment shall continue to remain in force after conversion into LLP.
• If Company is appointed anywhere for some role or capacity it will continue to remain with LLP as if
LLP was appointed for such role.

8. Legal Aspects of
Conversion
8
• Every director of the Company will remain personally liable for the acts conducted prior to the
conversion of Company into LLP.
• Any approval or licence issued in the name of the Company will remain effective and valid for the LLP
post conversion subject to the any other provision prescribed by authority permitting such approval or
licence.
• Once Company is converted into LLP, within 14 days of conversion till a period of 12 month, LLP
should mention in its every official correspondence, a statement that it has been converted from
Company to LLP from its conversion date, name and CIN of Company
Any LLP which contravenes this provision will be punishable with fine not less than Rs.10,000
extended upto Rs. 1,00,000 with additional fine of Rs. 500 per day till the date default subsist.

9. Points to
Remember
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• Change in Sign Board, Letter head, stationary and other items where old name as Company used to be
displayed
• Application to update name in PAN.
• Intimation and application to other authorities where Company is registered i.e. GST, EPF, ESI etc.
• Intimation to various suppliers and parties with whom Company has business.
• Intimation to banks where Company is maintaining bank accounts.

10. 10
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