How to Convert OPC into LLP?

Updated on February 18, 2025 02:36:07 PM

Many business founders and entrepreneurs start their entrepreneurship journey with an OPC and later they can convert One Person Company (OPC) into a Limited Liability Partnership (LLP). This conversion allows for more flexibility, better management structures, and increased credibility.

The process of Conversion of OPC into LLP can be complex and requires careful consideration of legal and regulatory requirements. In this comprehensive guide, we will explore the steps involved in converting OPC into LLP and provide valuable insights to help you navigate through the conversion process smoothly or take legal advice from Professional Utilities.

An OPC, or One Person Company, is a type of business structure that allows a single individual to operate a company as a separate legal entity. The OPC provides limited liability protection to the sole proprietor while maintaining the advantages of a private limited company.

LLP stands for Limited Liability Partnership. It is a partnership firm where the liability of partners is limited to the extent of their contribution to the business. An LLP combines the benefits of both partnerships and companies, providing limited liability protection to partners and flexibility in management.

• Flexibility in Management: LLP allows for more flexibility in management and decision-making compared to an OPC, where a single person has complete control.
• Limited Liability: By converting to an LLP, the liability of partners is limited to the extent of their contribution. This provides personal asset protection and reduces the risk associated with business operations.
• Easy Transfer of Ownership: LLPs have provisions for transferring ownership without affecting the existence or operations of the business. This makes it easier to bring in new partners or transfer ownership to family members.
• Better Credibility: LLPs often enjoy better credibility in the eyes of stakeholders, including suppliers, customers, and financial institutions. This can open doors to new business opportunities and financing options.

• The OPC should have completed at least two years from the date of incorporation.
• The turnover of the OPC should not exceed the prescribed limit as per the Companies Act, 2013.
• The OPC should not be in default of filing annual returns and financial statements.
• All the members and shareholders of the OPC must provide their consent for the conversion.

• Consent from Members: Take consent from all the members of OPC for the conversion of OPC into LLP.
• File Conversion Application (Form 17): After taking consent from all the members it is required to file Form 17 with ROC for conversion application.
• Obtain DSC and DIN:All the proposed partners of the LLP must obtain DSCs and DIN from the MCA.
• Reservation of Name (Form-3): Choose a unique name for your LLP and submit an application for name reservation to the Registrar of Companies (ROC).
• Drafting of LLP Agreement: Prepare the LLP agreement, outlining the rights and duties of partners, profit-sharing ratio, and other relevant provisions. File the agreement along with the conversion forms and necessary documents with the ROC.
• Obtaining Certificate of Incorporation: If all the documents are in order, the ROC will issue the Certificate of Incorporation, officially converting the OPC into an LLP.

• Digital Signature Certificates (DSCs)
• Director Identification Number (DIN)
• No Objection Certificate (NOC)
• Consent of Partners
• Copy of LLP Agreement
• Proof of Address
• Proof of Identity

Converting an OPC into an LLP can be a strategic decision for entrepreneurs looking to change their business structure and enjoy the benefits of limited liability and flexibility in management. By following all the necessary steps required for the conversion of OPC into LLP, it can be easily converted for better growth and management opportunities.

For further assistance in the conversion of OPC into LLP you can contact consultants at Professional Utilities.