Company Conversion — Private to LLP / OPC to Pvt Ltd

A Pvt Ltd converts to an LLP in Form INC-32A under s.366 of the Companies Act 2013 read with s.55 of the LLP Act 2008 — the company files the form with the scheme, the ROC issues the certificate of conversion, and the LLP is registered on the same filing. An OPC converts to a Pvt Ltd in Form INC-6 voluntarily (no longer compulsory past the ₹50 lakh / ₹2 crore limits since the 2021 amendment). An LLP converts to a company in Form URC-1 under s.366(3) with a statement of assets and liabilities.

Each route preserves the business — assets and liabilities vest in the new entity by operation of law — and each carries the same tax question: does the conversion meet the s.47(xiii) or s.47(xiiib) conditions for tax neutrality? The conditions (all members becoming partners/shareholders, all assets and liabilities vesting, no consideration beyond the new interests) are what keep the conversion free of capital-gains tax.

The s.47(xiii)/(xiiib) exemption is conditional, and the conditions are structural: all members must move to the new entity, all assets and liabilities must vest, and the consideration must be only the new interests. A scheme that leaves one shareholder out, retains an asset in the company, or pays cash consideration breaks the exemption and makes the conversion a taxable transfer of capital assets at market value. The tax memo, prepared before the resolutions, shapes the scheme so the exemption survives.

The operational migration is the hidden cost: the new PAN, GST re-registration (the old GSTIN is surrendered and a new one applied for), bank accounts, and the novation of major contracts. None of it blocks the conversion — the certificate of conversion is the legal event — but the business cannot run on the new entity until the migration is done, which is why the engagement runs past the certificate.