UNLISTED PUBLIC LIMITED COMPANY TO LLP
Many a times, it makes better business sense to run an LLP than an unlisted public company. We at SunShine Corporate Solutions will help you analyze your business, and assist you with the process of conversion of public limited company to LLP. It will help business operations, and also present some distinct advantages.
Advantages of LLP :
Here are some of the most cited advantages on conversion of unlisted public limited company to an LLP instead of a private limited company:
• Assets and liabilities: During conversion of public limited company to LLP, all the assets and liabilities of the public company are directly transferred to the newly formed LLP. There is no separate paperwork required to retain these.
• Taxes: an LLP is exempted from many taxes that a limited company has to pay. Under the Income Tax Act, 1961, a Limited company is liable to pay the Minimum Alternate Tax (MAT) and the Dividend Distribution Tax (DDT).
• Compliance: An LLP has minimal compliance when it comes to meetings and statutory records. On the other hand, a limited company needs to keep an up to date record of each and every meeting and comply with many more filings and thus an LLP provides for a more effective business model.
• Stamp duty: An LLP does not have to pay stamp duty on the movable and immovable properties of the previously public company. This is because all these properties are directly transferred during conversion of public limited company to LLP. Therefore, a new instrument of transfer is not required.
• Capital Gains Tax: An LLP is not charged Capital Gains tax when property is transferred from the public company to the new LLP, because the ownership remains the same.
Requirements to be fulfilled:
Before the conversion of unlisted public limited company to an LLP can take place, the company has to fulfill many requirements, which are listed below:
• The company should get a letter of consent for the conversion process from all its unsecured creditors.
• The firm should have at least 2 Designated Partners.
• At least 1 of the Designated Partners of the LLP should be a resident of India.
• If a corporate company is one of the partners of the new LLP, then it has to nominate a neutral person for the role
• The company has to file its income tax returns and annual returns along with up to date information
• All the shareholders of the unlisted public company automatically become partners at the LLP. Also, each partner has the same proportion of share in the LLP as he or she had as a shareholder of the public company, on the date of conversion.
• Each partner should contribute to the LLP in some form, but it is not termed as share capital
• It is mandatory for all the Designated Partners to have an Director Identification number (DIN)
• It is mandatory for all the Designated Partners to obtain a Digital Signature Certificate (DSC)
There are a number of steps involved in the conversion of unlisted public company. It can be difficult to navigate the maze of procedures involved in the process. It can take many months before the public company is finally converted to an LLP.
Sun Shine Corporate Solutions has been working with businesses for many years, and we are familiar with the corporate procedures involved in the conversion. In addition to business conversion, we also offer a wide range of company incorporation and company formation services across India. Our efficiency in completing procedures has helped many companies increase their profits.
We encourage you to delegate your corporate conversion processes to us and expedite your operations. Please contact us for customized registration solutions that are specific to your business.