LLP Form 18: converting a private or unlisted public company into an LLP

Which companies can convert?

A private company can convert under section 56 and the Third Schedule. An unlisted public company can convert under section 57 and the Fourth Schedule. Listed companies cannot use this route.

Two conditions are central. First, all shareholders must become partners of the LLP and nobody else can. If a shareholder of an unlisted public company is unwilling or unable to join, the others must acquire those shares under the articles before applying. Second, there must be no security interest in the company's assets subsisting or in force when the application is made, so charges must be satisfied and Form CHG-4 filed first.

Documents attached to Form 18

The form is signed by a designated partner and certified by a practising CA, CS or cost accountant. Before applying, ensure the company's AOC-4 and MGT-7 filings are up to date, as the Registrar checks the compliance history.

• Consent of all shareholders to the conversion
• Statement of assets and liabilities, certified by the company's auditor
• List of unsecured creditors with their consent
• Approvals from any other authority required for the conversion
• Board and shareholders' resolutions approving conversion
• Proof that all charges are satisfied and no annual filings are pending

Fees

Form 18 carries a filing fee under Annexure A of the LLP Rules, and FiLLiP carries the incorporation fee linked to the LLP's contribution. Stamp duty implications on vesting of immovable property differ between states, so check them before you file.

The income-tax angle

Under the 1961 Act, conversion of a private or unlisted public company into an LLP was exempt from capital gains only if strict conditions were met, including small turnover and asset limits in the preceding years, shareholders becoming partners in the same proportion as their shareholding, and restrictions on profit-sharing and withdrawal for some years after conversion. The Income-tax Act, 2025 has renumbered these provisions from 1 April 2026, so confirm the current section and conditions with your tax adviser.

If the conditions are breached later, the exemption can be withdrawn and tax becomes payable. A tax review before conversion is essential, particularly for companies with accumulated profits or unabsorbed losses.

After conversion

Within 15 days of registration, the LLP must inform the Registrar of Companies with which the company was registered. For 12 months, official correspondence must mention the conversion and the former company's name and CIN. File Form 3 with the LLP agreement within 30 days, apply for PAN, TAN and GST, and update bank accounts, licences and contracts. Not notifying the Registrar of Companies can attract a fine of ₹10,000 to ₹1 lakh plus daily fines for continuing default.

Common mistakes

Typical errors include applying while a charge is still open, missing consent of a small shareholder, unaudited or outdated asset statements, and pending annual returns. Foreign-owned companies must also consider FDI rules, as FDI in LLPs is allowed only in sectors where 100% FDI is permitted under the automatic route without performance-linked conditions.

Step by step

1. 1Check eligibility

   Confirm no open charges, all shareholders willing and filings up to date.

2. 2Pass resolutions

   Board and shareholders approve the conversion.

3. 3Get consents and statements

   Obtain creditor consent and an auditor-certified asset and liability statement.

4. 4Satisfy charges

   Close loans and file charge satisfaction before applying.

5. 5File FiLLiP with Form 18

   Submit on MCA V3 with all attachments and fees.

6. 6Notify ROC and update records

   Inform the ROC within 15 days and complete PAN, GST and bank updates.