Companies Act 2013 · Entity Conversion Advisory

Change in Business Structure

Outgrown your current entity, or need a leaner one? Practical guidance to convert your business structure without disrupting operations, contracts, or bank accounts.

From Proprietorship — Formalise & Scale

2 Services

Proprietorship → OPC

Convert your sole proprietorship into a One Person Company for limited liability and a separate legal identity.

Proprietorship → Private Limited

Convert your proprietorship into a private limited company to raise funding and build institutional credibility.

OPC Conversions

2 Services

OPC → Private Limited

Convert your One Person Company into a private limited company once you cross mandatory thresholds or add co-founders.

Private Limited → OPC

Convert an eligible private limited company into a One Person Company to simplify ongoing compliance.

LLP ↔ Private Limited

2 Services

LLP → Private Limited

Convert your LLP into a private limited company to raise equity funding or bring institutional investors.

Private Limited → LLP

Convert your private limited company into an LLP for simpler compliance and pass-through tax treatment.

Partnership Firm Conversions

2 Services

Partnership Firm → LLP

Convert your partnership firm into an LLP for limited liability protection and separate legal identity.

Partnership Firm → Private Limited

Convert your partnership firm into a private limited company to access funding and limited liability protection.

Public ↔ Private Company

2 Services

Private Limited → Public Company

Convert your private limited company into a public company to raise public capital or prepare for listing.

Public Company → Private Limited

Convert your public company into a private limited company to reduce compliance burden.

Non-Profit Structure Conversions

2 Services

Trust / Society → Section 8

Convert your registered Trust or Society into a Section 8 company for greater credibility.

Company → Section 8

Convert an existing company into a Section 8 non-profit company for charitable, educational or social objectives.

Understanding conversion of business structure

What this section covers

As a business grows, the structure chosen at the start may stop fitting its ownership, funding or regulatory needs. Indian law provides several routes to move from one form to another, and each route has its own statute, approving authority and paperwork.

  • Conversions into a company: a partnership firm or LLP can register as a company under Part I of Chapter XXI of the Companies Act, 2013 (Section 366) and the Companies (Authorised to Register) Rules, 2014. A sole proprietorship has no direct statutory conversion route; a new company is usually incorporated and the business is transferred to it under an agreement.
  • Conversions into an LLP: a partnership firm, a private company or an unlisted public company can convert under Sections 55 to 58 and the Second to Fourth Schedules of the Limited Liability Partnership Act, 2008.
  • Changes within the company form: public to private and private to public under Section 14 and Section 18, OPC to private limited and back under the Companies (Incorporation) Rules, 2014, and conversion of an existing company into a Section 8 company.
  • Non-profit structures: moving the activities of a trust into a Section 8 company.

Who needs these services

  • Proprietors and partnership firms that want limited liability, a separate legal identity or the ability to issue shares to investors.
  • Single-founder OPCs that are adding co-founders or investors.
  • Private limited companies whose shareholders prefer the LLP form for its lighter compliance, and LLPs moving to a company to raise equity or offer ESOPs.
  • Private companies planning a public issue or wider shareholding, and public companies with a closely held base that want private company status.
  • Charitable trusts and companies whose objects are charitable and that want a Section 8 licence.

A conversion affects tax positions, registrations, contracts, bank accounts and licences held in the old name. These should be listed before the process starts, since many of them need separate updates after the new certificate is issued.

How to choose between the services

  • Proprietorship to private limited or proprietorship to OPC: a new company is incorporated and the proprietor’s business, assets and liabilities are transferred to it. OPC suits a sole owner; private limited suits two or more owners.
  • Partnership to private limited: used when partners want share capital and an investor-ready structure. Partnership to LLP keeps a partnership-style arrangement with limited liability.
  • Private limited to LLP: generally considered where no external equity funding is planned. LLP to private limited is the reverse, often chosen before fundraising.
  • OPC to private limited: since 1 April 2021 an OPC can convert at any time once it meets the minimum members and directors. Private limited to OPC needs a single member and conditions in the rules.
  • Public to private limited: needs a special resolution and Central Government approval, exercised through the Regional Director. Private limited to public needs altered articles and meeting public company requirements.
  • Company to Section 8 or trust to Section 8: used when the organisation will apply profits only to its charitable objects; the licence is granted by the Regional Director.

Expertvuw assists with documentation and coordination; filings are certified by independent professionals where the law requires, and approval rests with the ROC or Regional Director.

Frequently asked questions

Can a sole proprietorship be converted directly into a company?

The Companies Act, 2013 does not provide a direct conversion route for a sole proprietorship. In practice, a new private limited company or OPC is incorporated and the proprietor’s business is transferred to it through a business transfer agreement, with GST, bank accounts and licences moved to the company. Tax implications of the transfer should be reviewed with a qualified professional.

Is there a waiting period before an OPC can become a private company?

No longer. Under the Companies (Incorporation) Second Amendment Rules, 2021, effective 1 April 2021, the earlier two-year restriction and the capital and turnover limits were removed. An OPC can convert into a private or public company at any time, provided it meets the minimum number of members and directors for the new form.

Which law governs converting a private company into an LLP?

Conversion of a private company into an LLP is governed by Section 56 and the Third Schedule of the Limited Liability Partnership Act, 2008. Firms convert under Section 55 and the Second Schedule, and unlisted public companies under Section 57 and the Fourth Schedule. Conditions include consent of shareholders and treatment of existing creditors, subject to the Registrar’s review.

Who approves conversion of a public company into a private company?

Under Section 14 of the Companies Act, 2013, conversion of a public company into a private company requires a special resolution and the approval of the Central Government, which is exercised by the Regional Director. After approval, the company files the order and altered articles with the Registrar, who issues a fresh certificate of incorporation.

Does conversion change the PAN, GST registration and existing contracts?

It depends on the route. Where a new entity is created, such as a proprietorship business moving to a company, new registrations are generally required. Where the statute vests assets and liabilities in the converted entity, such as firm-to-LLP conversion, contracts continue, but registrations, bank records and licences still need updating. Each authority’s current procedure should be checked.