AB Consulting Limited decided to convert into a Limited Liability Partnership (LLP) for several strategic reasons. The company had been experiencing losses in its business, highlighting the need for operational restructuring and more efficient management of resources. Additionally, the increasing compliance burden of operating as an unlisted public company—including mandatory board meetings, audits, and multiple statutory filings—was becoming a significant constraint. The promoters also recognized that, at this stage, the business required more groundwork, strategic planning, and consolidation rather than immediate external fundraising.
At the time of conversion, the company had a paid-up share capital (PSC) of ₹50 Lakhs, a total of 10 shareholders, and 4 directors: Mr. A, Ms. B, Mr. C, and Ms. D. Considering all these factors, the promoters decided that conversion into an LLP would provide greater operational flexibility, reduced compliance obligations, and a more agile structure suited to the current needs of the business. The following is the process of conversion that they followed:
Step 1: Board Meeting
Mr. A, being one of the directors, issued a Notice of Board Meeting along with the agenda items including conversion of the company into an LLP and approval of notice for an Extraordinary General Meeting (EGM).
During the Board Meeting, the directors deliberated on the proposal, approved the idea of conversion, and recommended the matter to shareholders by passing a board resolution.
Step 2: Extraordinary General Meeting (EGM)
A Notice of EGM was sent to all shareholders through email, clearly stating the agenda of conversion into LLP.
At the EGM, the shareholders unanimously approved the proposal and passed a Special Resolution for conversion.
In compliance with the provisions of the Companies Act 2013, the company filed Form MGT-14 within 30 days of passing the resolution.
Step 3: Due Diligence
Before proceeding with the actual conversion application, the following checks were ensured:
- Consent was obtained from all shareholders to convert the company into an LLP.
- All proposed partners of the LLP were the same as the shareholders of the company.
- No security interest existed on the company’s assets.
- All statutory filings, including the latest balance sheet and annual returns, were up to date.
Step 4: Name Reservation
Mr. A initiated the process by applying for reservation of the proposed LLP’s name through the RUN-LLP (Reserve Unique Name – LLP) service on the MCA portal. It is worth noting that name reservation can alternatively be applied for directly in Form FiLLiP at the time of incorporation.
Step 5: Filing Conversion Forms
- Form FiLLiP (Form for incorporation of LLP) was filed with all supporting documents as per Section 11 of the LLP Act, 2008.
- Form 18 (Application and Statement for Conversion of a Private Company / Unlisted Public Company into LLP), as prescribed under Section 56 and Schedule IV of the LLP Act, 2008, was filed simultaneously with Form FiLLiP. Since Form 18 is not directly visible on the MCA portal, it can be accessed through the following path:
MCA Home > MCA Services > Company e-Filing > LLP Forms Download > FiLLiP- Form-18
Form 18 required answering certain compliance-related questions, such as:
- Whether there are any pending prosecutions or proceedings against the company.
- Whether any earlier application for conversion was rejected.
- Whether any order or judgment by Court / Tribunal is subsisting.
- Whether the company is engaged in financial activities.
Mandatory Attachments with Form 18
- Statement of Assets and Liabilities of the company, certified by the auditor (not older than 15 days).
- List of all secured creditors with their consent, if any.
- Approval from regulatory bodies, if applicable.
- Copy of acknowledgement of the latest Income Tax Return.
- Auditor’s Certificate.
Step 6: Fresh Certificate of Incorporation
Upon verification of documents and forms, the Registrar of Companies (ROC) issued a Fresh Certificate of Incorporation for the newly formed LLP.
Thus, AB Consulting Limited successfully transitioned into AB Consulting LLP.
Other Consideration
It is important to note that the process of conversion from a private limited company into an LLP is not limited to compliance under the LLP Act, 2008, and its allied rules. In practice, there are also tax implications (such as treatment of capital gains, carry forward of losses, MAT credit, and stamp duty aspects) as well as intellectual property considerations (like ensuring that the company’s trademark, brand name, or other IP assets are duly protected and transferred). However, this article has been intentionally restricted to a compliance-focused discussion under the LLP Act read with applicable rules, keeping the narrative practical and concise.
Conclusion
The conversion of AB Consulting Limited into AB Consulting LLP demonstrates how businesses can strategically streamline their corporate structure while ensuring full adherence to statutory requirements. By following the due process under the LLP Act, 2008—including board and shareholder approvals, due diligence, name reservation, and filing of Forms FiLLiP and 18—the company was successfully transitioned to a structure with reduced compliance obligations. This case highlights that careful planning and strict compliance with regulatory provisions are essential to effect a smooth and legally valid conversion, minimizing risks and ensuring operational continuity.