LLP ↔ Company Conversion Tax & Compliance Calculator
Check if your LLP-to-company (or company-to-LLP) conversion is tax-neutral, estimate stamp duty by state, and see the exact compliance steps.
⚠ 5 conditions unmet — conversion may attract capital gains tax. Tick all boxes before proceeding.
Article 25 of Maharashtra Stamp Act. Can be significant for asset-heavy startups.
Section 47(xiiib), Income Tax Act 1961. LLP Rules 2009 (Rule 39). Stamp duty rates are indicative and subject to state amendments. Always get a legal opinion and CA certificate before proceeding. MCA processing timelines are estimates.
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Frequently asked questions
Is converting an LLP to a company taxable in India?
Conversion of an LLP to a company is treated as a tax-neutral transfer (not a capital gain event) under Section 47(xiiib) of the Income Tax Act, subject to conditions: (1) all assets and liabilities of the LLP transfer to the company; (2) partners receive shares in proportion to their capital; (3) the LLP is dissolved; (4) all ex-partners hold at least 50% of the company's equity for 5 years after conversion; (5) no other consideration is paid to partners at conversion.
What happens if the 5-year lock-in is violated after LLP to company conversion?
If any condition of Section 47(xiiib) is violated — including partners' aggregate shareholding falling below 50% within 5 years — the exemption is withdrawn retrospectively. The capital gain is computed as if the conversion had been a taxable transfer, and tax (with interest) becomes payable in the year of violation.
What is the stamp duty on LLP to company conversion?
Stamp duty on conversion varies by state and is levied on the value of assets transferred. States like Delhi and Maharashtra levy stamp duty at 5–8% of asset value (or net worth). Some states have concessional rates for startup conversions. The Registrar of Companies (ROC) conversion process under Rule 39 of LLP Rules does not attract MCA filing fees beyond standard e-form costs.
Can an LLP with accumulated losses convert to a company and carry forward those losses?
Yes, under Section 47(xiiib) read with Section 72A, if the conversion is tax-neutral, the accumulated losses and unabsorbed depreciation of the LLP are deemed to be the losses of the successor company and can be carried forward. However, the 51% voting power continuity rule under Section 79 applies to the company after conversion.
What is the procedure for converting an LLP to a private limited company?
The process under Rule 39 of LLP Rules 2009 and Companies Act 2013: (1) obtain LLP partner consent; (2) file Form 18 (LLP) with ROC; (3) MCA approves and issues Certificate of Registration of the new company; (4) transfer all assets, liabilities, and contracts to the company; (5) file intimation with tax authorities, banks, and GSTIN; (6) file FC-GPR if foreign partners are involved. Timeline: 3–6 months.