Leave & License Agreement

A leave and licence agreement is an agreement that enables one party to allow another party to use their immovable assets, i.e., property, for a specific period without any change in the ownership. Leave and Licence agreement is different from Lease Agreement.

Advantages of Conversion

  • By converting into LLP, the company saves Dividend Distribution Tax, Minimum Alternative Tax, and Income Tax because interest and remuneration are paid to partners as a salary that is payable to directors.
  • SAnother advantage for an LLP is that No audit is required unless capital exceeding Rs. 25 lakhs or Turnover exceeding Rs. 40 Lakhs.
  • LLP has lesser compliance requirements as compared to a company.
  • No capital gain shall be charged on transfer of property from Company to LLP.
  • No stamp duty is required to be paid in case of transfer of movable and immovable properties.
  • There is no need of compliance related to meetings and maintenance of huge statutory records.

Process of Conversion Into LLP

  • Call Meeting of Board of directors and authorize conversion into LLP.
  • Consent of shareholders for conversion.
  • File FORM -14 and intimate Registrar of companies.
  • Drafting of LLP agreement, name of the partners and profit-sharing ratio.
  • Address proof of Registered office.