Change into a Limited Liability Company
A partnership and a limited partnership can be changed into the form of a limited liability company. The resolution to change the company form must be unanimous. Thus, the change cannot be made if one of the partners opposes it. In order to change the company form of a limited partnership, the consent of the sleeping partners is also required.
The decision to convert into a limited liability company is taken in the order in which the Partnership agreement is amended. The decision must include also an approval of articles of association drawn up in accordance with the Limited Liability Companies Act. A document of the decision must be prepared in writing, including, or accompanied by a separate attachment including the following items:
the date;
the shareholders and the number of shares owned by each shareholder;
the accounting period of the company (or alternatively, it must be set out in the articles of association);
articles of association (can be enclosed as an appendix); and
an account regarding the possible subscription payment of shares, individualizing the ownership and the payment to be made, matters affecting the evaluation of the property and the procedures followed when evaluating the property.
Following the signing of the agreement, the partners must hold an annual general meeting, at which the board members of the limited liability company and its accountants are elected. The board of directors and the accountants can also be elected in the agreement regarding the change of the company form, in which case no separate election meeting is required.
A notice regarding the change of the company form must be sent to the Trade Register. The necessary forms and the instructions on how to fill them in can be found on the website of the BIS, as well as information regarding the attachments required for the notice. It should be kept in mind that the notice to the Trade Register must be sent within three months from signing the agreement regarding the change of the company form or else the change of the company form becomes unenforceable. The company becomes a limited liability company once the change has been registered onto the Trade Register.
No new shareholders can be acquired when changing the company form. If the company wishes to acquire new shareholders, it can do so after having registered the company, e.g. by way of a free issue.