Conversion & Clousure

Closing Your Private Limited Company

If your business is not running properly in a private limited company, or you are facing continuous losses in
your business, it is better to close your private limited company and start a new journey. Private Limited
company also needs to be shut down when there are no exchanges or directors of the company not ready to start its operations.

There are 4 ways by which private limited company business comes to an end –

1 Sell the company
2 Voluntary winding up
3 Compulsory winding up
4 Defunct company winding up

Sell The Company

One way of voluntarily winding up the company is selling the company i.e. Selling shares of the company to
some other party. A company can be sold by selling the majority of shares of the company to any other
party. Although it is technically not a winding up, the stakes are transferred to another person or entity and
the majority shareholders are released from their stocks and responsibilities.


The List Of Documents Required For Company Closure


 Consent of the Company's creditors
 Indemnity Bond duly notarized by all directors (in Form STK 3)
 A certified statement of liabilities is prepared by a chartered accountant that details the company's
assets and liabilities.
 CTC of Special Resolution officially signed by each of the company's directors
 Affidavits signed by all of the company's directors in Form STK 4
 PAN and Aadhaar card of directors
 Digital Signature of the Directors
 Letter of Consent and Affidavit of the Director
 A statement regarding any pending legal action taken against the company

One Person Company (OPC) Definition

One person company is a new concept introduced in India which is owned and managed by a single
entrepreneur whereas in case of private limited company, two or more persons are needed to incorporate a
private limited company. A nominee must be registered in case of OPC at the time of registration in form INC-3. The proposed director must have DIN & DSC and he/she should be a citizen of India. There is no need to change the office location of the previous private limited company.

Many persons now days transferring their private limited company into one Person Company
For making conversion from private limited company into one Person Company (OPC), the private limited company must have total paid up capital of Rs.50 Lakhs or its annual average turnover in previous 3 financial years must be Rs.2 crores. OPC also needs a nominee director so that responsibility can be transferred to the nominee director, if the director of the company is unable to manage its business operations. An alteration is also needed to be done in MOA & AOA of the company.

What Is Included In Our Package?

Eligibility Consultation
Document Preparation
Application Drafting
Government Fees

Public Limited Company Definition

A public company has 7 or more members and enjoys the benefit of raising capital by inviting general public to subscribe to its shares whereas private company limits number of members to 200 and cannot invite general public to subscribe to its shares. A public company enjoys many benefits as compared to private limited company such as raising reserves at a large scale, reducing debt etc. In case of private limited company, all reserves are raised by the existing members, shareholders and promoters and risk is also shared between the shareholders.

What Is Included In Our Package?

Eligibility Consultation
Document Preparation
Application Drafting
Government Fees

Conversion Of Partnership Into LLP

As an entrepreneur, India offers you many options to select a business. You can choose among various
forms of businesses but before choosing the form of business, you must know the requirements, advantages & disadvantages of all these forms of business. You need to check that which form of business benefits you the most. If we talk about partnership, one of the biggest disadvantages of this form of business is unlimited liability. It means personal assets of the partners are at high risk but many forms of business provide you the advantage of limited liability too. For ex – LLP & Private limited company.
Entrepreneurs now days’ converting the partnership firms to LLP’s to prevent risk of unlimited liability.

There are many reasons for converting partnership firm into an LLP and they are as follows –

LLP is very popular among small & medium sized businesses. Any partnership firm want to convert into LLP
must be registered under India partnership act, 1932. Partnership firms who are not registered under Indian
partnership act 1932 cannot convert partnership firm into LLP.

1 Separate legal entity
2 Unlimited number of partners
3 Limited liability
4 Ease of ownership transfer


What Is Included In Our Package?

Eligibility Consultation
Document Preparation
Application Drafting
Government Fees

Minimum Requirements To Convert Partnership Firm Into LLP

1 Minimum 2 partners
2 DPIN for all partners
3 DSC for all partners
4 One designated partner should be an Indian citizen
5 Consent from all unsecured creditors for conversion in LLP
6 The partners shall receive consideration only by way of allotment of shares in LLP.
7 There should be some sort of contribution from every partner
8 Up to date submission of income tax returns.

Advantages Of Converting Partnership Firm Into LLP

 Separate legal entity
 Limited liability
 Minimal compliances
 Set up cost is low
 Tax advantages

Procedure Of Converting Partnership Firm Into LLP

The procedure of converting partnership firm into LLP is as follows –
 Limited liability
 Minimal compliances
 Set up cost is low
 Tax advantages
 Procedure Of Converting Partnership Firm Into
LLP

Step 1 – In the first step, make sure you have DSC (Digital signature certificate)
while converting a partnership firm into an LLP. This is the first compulsory requirement to convert partnership firm into an LLP. If you are not having DSC, apply for it as early as possible as the same is required for all the partners.

Step 2 – In the next step, you have to obtain a DPIN (Designated partner identification number). It is also
a mandatory requirement for at least 2 partners to proceed further with the conversion process. DPIN is
a unique number given to each person holding position of LLP partner or director. It is issued for a
lifetime without any renewal.

Step 3 – In the third step, you have to select the name for an LLP and apply for name approval with
ministry of corporate affairs (MCA). Selection of name is not an easy task and it should be selected
carefully. It should be unique & limited liability partnership (https://www.finacbooks.com/llp-registration)
must be used at the end of the company’s name.

Step 4 – After getting the name approval from MCA in step-4, you have to file LLP form 17 along with the
incorporation application as well as subscribers sheet to convert a partnership firm into LLP. The
following documents mentioned below must be mandatorily attached with LLP form 17 –

1 Copy of acknowledgement of latest income tax return
2 Statement of assets & liabilities of the firm certified by any chartered accountant of India
3 Statement of consent of partners of the firm
4 List of approval of all the secured creditors for converting a partnership firm into LLP.
5 No objection certificate from tax authorities.
6 Approval from any regulatory body/authority



Step 5 – In the fifth step, LLP form 2 & LLP form 3 is also to be filed along with LLP form 17. LLP form 2
includes incorporation document and subscriber’s statements. The following documents mentioned
below must be submitted along with LLP form -2 -

1 Proof of registered office of LLP
2 Approval of regulatory authority (If required)
3 Subscriber’s sheet including consent
4 Details of LLP/company in which person is a director or a partner.

Step 6 – After successfully filing all the documents along with the prescribed fees, the certificate of
conversion will be issued by registrar after verifying all the documents.

Proprietorship To Private Limited Company

Most of the persons start their business as sole proprietor due to less compliance requirements but due to
growth in the business, sole proprietor needs a separate business account for their business transactions.
The best way to complete all these requirements is to convert sole proprietorship into a private limited
company. In order to convert a sole proprietor ship firm into a private limited company, business owner needs to incorporate a new fresh private limited company by entering into an agreement. The promoters of the company indulge themselves into an agreement for the main objective of selling the business. Business
owner must mention about this takeover as one of the objectives in memorandum of association (MOA).

What Is Included In Our Package?

Eligibility Consultation
Document Preparation
Application Drafting
Government Fees

Winding Up Of A Company

Winding up means ending or dissolving a company. In other words, it is the process by which life of a
company brought to an end. Winding up of company includes selling of assets, paying the creditors and
distribution of remaining assets to the partners or shareholders. There are many reasons for winding up a
company such as loss in business, company closure, passing away of promoters etc.

Law Governing The Procedure Of Winding Up

Section 270 of the company’s act 2013 governs the procedure of winding up of a company in India.

What Is Included In Our Package?

Eligibility Consultation
Document Preparation
Application Drafting
Government Fees

LLP Winding Up

Winding up of an LLP is an easy process. This process can be initiated voluntarily or by tribunal or by striking off the LLP name by registrar. In winding up of an LLP, business assets are sold as well as creditors are paid and in event of any surplus profit or assets, they are distributed among LLP partners as per LLP agreement.

What Is Included In Our Package?

Eligibility Consultation
Document Preparation
Application Drafting
Government Fees