Power converters and their interfacing networks are often treated as modular state-space blocks for small-signal stability studies in microgrids; they are interconnected by matching the input and output states of the network and converters. Virtual resistors have been widely used in existing models to generate a voltage for state-space models of the network that require voltage inputs. This paper accurately quantifies the adverse impacts of adding the virtual resistance and proposes an alternative method for network modelling that eliminates the requirement of the virtual resistor when interfacing converters with microgrids. The proposed nonlinear method allows initialization, time-domain simulations of the nonlinear model, and linearization and eigenvalue generation. A numerically linearized small-signal model is used to generate eigenvalues and is compared with the eigenvalues generated using the existing modelling method with virtual resistances. Deficiencies of the existing method and improvements offered by the proposed modelling method are clearly quantified. Electromagnetic transient (EMT) simulations using detailed switching models are used for validation of the proposed modelling method.