Setting Up of Business, Industrial and Labour Laws · Limited Liability Partnership

Conversion into LLP and Foreign LLP Rules

Updated 11 October 2026 · Fact-checked

A firm, private company or unlisted public company can convert into an LLP under Sections 55, 56 and 57, using the Second, Third and Fourth Schedules. The Registrar issues a certificate of registration, and assets and liabilities vest in the LLP. Foreign LLPs are governed by rules made under Section 59.

Understand Conversion into LLP and Foreign LLP

An LLP is a separate legal entity with limited liability and the flexibility of a partnership. Many businesses start as a partnership firm or a company and later prefer this form. The LLP Act, 2008 lets them change form without winding up and starting afresh.

Three kinds of entity can convert. A firm converts under Section 55 and the Second Schedule. A private company converts under Section 56 and the Third Schedule. An unlisted public company converts under Section 57 and the Fourth Schedule. A listed public company cannot use this route.

The Registrar must be satisfied that the applicant has complied with the relevant Schedule. He then registers the documents and issues a certificate of registration. The LLP exists from the date specified in the certificate. Section 58 governs this.

The effects are strong. From the date of registration, the LLP comes into existence under the name in the certificate. All property (tangible and intangible), assets, rights, privileges, liabilities, obligations and the whole undertaking of the firm or company vest in the LLP without further assurance, act or deed. The firm or company is deemed dissolved and removed from the records of the Registrar of Firms or Registrar of Companies.

A foreign LLP is an LLP formed outside India that wants a place of business in India. Section 59 does not set out the full regime. It empowers the Central Government to make rules on establishing a place of business and carrying on business in India. Those rules may apply or incorporate, with suitable modifications, provisions of the Companies Act, 2013, or a prescribed regulatory mechanism.

Key rules to remember

Conversion of a firm: Firm → LLP: Section 55 + Second Schedule; Registrar registers documents and issues a certificate of registration under Section 58(1).
Conversion of a private company: Private company → LLP: Section 56 + Third Schedule; Shareholders become partners and are bound by the Schedule.
Conversion of an unlisted public company: Unlisted public company → LLP: Section 57 + Fourth Schedule; Only unlisted public companies qualify. A listed company is not covered.
Intimation after conversion: Inform the Registrar of Firms or Registrar of Companies within 15 days of the date of registration; Proviso to Section 58(1). The LLP gives this notice, with prescribed particulars, to the Registrar with whom the firm or company was registered.
Effects of conversion: From date of certificate: new LLP exists; property and liabilities vest without further assurance, act or deed; firm or company deemed dissolved; Section 58(4), which applies notwithstanding any other law.
Foreign LLP: Section 59: Central Government may make rules on place of business and carrying on business in India; Rules may apply Companies Act, 2013 provisions with modifications, or a prescribed regulatory mechanism.
Misuse of LLP name: Section 20: fine of ₹50,000 to ₹5,00,000; For carrying on business with 'LLP' or 'Limited Liability Partnership' (or a contraction or imitation) as the last words without being duly incorporated as an LLP.

How to solve Conversion into LLP and Foreign LLP questions

Use this order for any question on conversion or foreign LLPs. It keeps your answer in the ICSI style: provision, analysis, conclusion.

1Identify the entity: firm, private company, unlisted public company, or a foreign LLP.
2Match it to the section and Schedule: Section 55 and Second Schedule, Section 56 and Third Schedule, Section 57 and Fourth Schedule, or Section 59 for foreign LLPs.
3Check eligibility. A listed public company cannot convert. Note any fact that points to listing.
4State the procedure: compliance with the Schedule, Registrar's satisfaction, registration of documents, certificate of registration under Section 58(1).
5State the effects under Section 58(4): LLP name, vesting of property and liabilities, dissolution of the firm or company.
6Add the 15-day intimation to the Registrar of Firms or Registrar of Companies.
7For a foreign LLP, say that Section 59 empowers the Central Government to make rules, and apply the rules as the question permits.
8Close with a clear conclusion that answers the exact question asked.

Quickest way: Entity-to-Schedule match

When to use it: Use when time is short and the question asks which provision applies or what happens on conversion.

Write the pair: firm = 55 / Second; private company = 56 / Third; unlisted public = 57 / Fourth.
Write Section 58 in one line: Registrar registers and issues certificate; LLP exists from the date in it.
List three effects: new LLP, vesting without further act or deed, old entity deemed dissolved.
Add the 15-day intimation.
For foreign LLP, write: Section 59, rules by Central Government.

Common mistakes in Conversion into LLP and Foreign LLP

Saying any public company can convert into an LLP.
Students remember 'public company' and forget the word 'unlisted'.
Fix: Always write 'unlisted public company' as in Section 57. A listed company is outside the conversion route.
Mixing up the Schedules.
The three Schedules are similar in structure and easy to swap.
Fix: Remember the order: firm, private company, unlisted public company map to Second, Third, Fourth.
Saying assets transfer only after separate conveyances or deeds.
Students apply general transfer-of-property ideas.
Fix: Section 58(4)(b) says property and liabilities vest in the LLP without further assurance, act or deed.
Forgetting that the firm or company is dissolved on conversion.
Students focus on the new LLP and ignore the old entity.
Fix: Add that under Section 58(4)(c) the firm or company is deemed dissolved and removed from the records of the Registrar.
Stating the intimation period or the authority wrongly.
The 15-day proviso is a small detail inside Section 58(1).
Fix: Write: the LLP informs the Registrar of Firms or Registrar of Companies within fifteen days of the date of registration.
Describing Section 59 as a full code for foreign LLPs.
Students assume the section lists detailed requirements.
Fix: Say Section 59 enables the Central Government to make rules, which may apply Companies Act, 2013 provisions with modifications or a prescribed mechanism.

Worked examples

Example 1

Sharma & Sons, a partnership firm in Jaipur, wishes to become an LLP. Explain the provision under which it can convert and the effects of conversion on its property and liabilities.

Show the solution

Provision: Section 55 allows a firm to convert into an LLP in accordance with the Act and the Second Schedule.
Procedure: the Registrar must be satisfied that the firm has complied with the Second Schedule. He registers the documents and issues a certificate of registration under Section 58(1), stating that the LLP is registered from the date specified.
Effect on property: under Section 58(4)(b), all tangible and intangible property, assets, rights and privileges of the firm vest in the LLP without further assurance, act or deed.
Effect on liabilities: liabilities and obligations of the firm, and its whole undertaking, also vest in the LLP.
Effect on the firm: under Section 58(4)(c), the firm is deemed dissolved and removed from the records of the Registrar of Firms.
Follow-up: the LLP must inform the Registrar of Firms within fifteen days of the date of registration.

Answer: Sharma & Sons can convert under Section 55 and the Second Schedule. On registration, its property, liabilities and undertaking vest in the LLP without further act or deed, the firm is deemed dissolved, and the LLP must inform the Registrar of Firms within fifteen days.

Example 2

Bharat Tools Private Limited and Kaveri Infra Limited (a listed public company) both want to convert into LLPs. Examine whether each can do so.

Show the solution

Provision for private companies: Section 56 permits a private company to convert into an LLP under the Third Schedule.
Application to Bharat Tools: it is a private company, so it may convert if it complies with the Third Schedule and the Registrar is satisfied.
Provision for public companies: Section 57 permits only an unlisted public company to convert, under the Fourth Schedule.
Application to Kaveri Infra: it is a listed public company, so it does not fall within Section 57.
Effect for Bharat Tools: after the certificate of registration, its property and liabilities vest in the LLP, the company is deemed dissolved, and the LLP informs the Registrar of Companies within fifteen days.

Answer: Bharat Tools Private Limited can convert under Section 56 and the Third Schedule. Kaveri Infra Limited cannot use this route, because Section 57 covers only unlisted public companies.

Exam tips

Learn the section-to-Schedule pairs cold. Many questions test only this match.
In a short note on conversion, always cover three points: eligibility, certificate of registration, and effects under Section 58(4).
For foreign LLPs, anchor your answer in Section 59 and say the details come from rules. Do not invent specific requirements.
Check the facts for the word 'listed'. It decides whether Section 57 applies.
Use the ICSI answer shape: provision, application to facts, conclusion in one clear line.

Practice questions from Limited Liability Partnership

Conversion into LLP and Foreign LLP in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Conversion into LLP and Foreign LLP: frequently asked questions

Which sections of the LLP Act deal with conversion into an LLP?

Section 55 covers firms, Section 56 covers private companies and Section 57 covers unlisted public companies. Section 58 deals with registration and the effect of conversion.

Can a listed public company convert into an LLP?

No. Section 57 allows only an unlisted public company to convert. A listed public company is not covered by the conversion provisions.

What happens to the assets of the firm or company on conversion?

Under Section 58(4), all property, assets, rights, liabilities and the whole undertaking vest in the LLP without further assurance, act or deed. The firm or company is deemed dissolved.

What does Section 59 say about foreign LLPs?

It lets the Central Government make rules on how foreign LLPs may establish a place of business in India and carry on business. These rules may apply provisions of the Companies Act, 2013 with modifications, or a prescribed regulatory mechanism.