Before we introduce you to our ways of Conversion of Partnership Firm into LLP(Limited Liability Partnership), let us first understand the
- Meaning of a Partnership & its features,
- An LLP,
- Reasons for conversion,
- Eligibility of a partnership,
- Required documentation for conversion, and
- Ultimately the process of conversion.
You will get a clear idea about the involved business and its conversion. And, then we will introduce you to our process of conversion.
Why convert a Partnership firm to an LLP?
- Member partners become more independent and hence, conduct risk-free business operations.
- Small and medium-sized partnership businesses can enter into an LLP agreement to bring their business synergies together with less risk.
- Conversion increases the flexibility in the decision-making processes of the company.
- The demise or withdrawal of a member-partner in a partnership firm may cause the company to disintegrate, which is not the case with LLP.
- The liability of partners in LLP is limited to the amount of capital invested.
- There is no minimum limit to the amount of capital to be invested.
- There is no upper limit in the case of the maximum number of member-partners of an LLP.
- More LLPs can merge to become a larger Limited Liability arrangement, unlike in the case of a partnership firm.
- The conversion of a partnership firm to an LLP would bring more investments into the firm because of the reputation of an LLP being a better, more flexible business arrangement.
- The central government has relaxed the regulations related to Foreign Direct Investments (FDI) into an LLP.
Pre-conditions for converting your partnership firm to an LLP
To convert a partnership firm into an LLP, the applicant must observe the following criteria:
- The partnership firm must have the consent of all the member-partners.
- The partnership firm must clear all the liabilities it might have accumulated over its operation.
- Consent from the certifying authority for conversion must be acquired if the firm has acquired any business certification under its name.
- The partnership firm also must have the consent of all the firm’s suppliers.
Also Read: Private Limited Company Registration
Required documentation for Partnership to LLP conversion
The applicant must submit the following documents along with the application for conversion of a Partnership firm into a Limited Liability Partnership:
- Designated Partner Identification Number (DPIN) or Director Identification Number (DIN) for the applicant firm’s member partners.
- Digital Signature Certificate: for the digital authentication of the documents.
- LLP-1 E-Form: To add “LLP” to the existing firm name, fill out the LLP-1 form.
- Draft of the proposed LLP agreement by the member-partners.
- Form-17 with Registrar of Companies (RoC): It is the conversion application that must be filled and submitted along with the following documents:
- Consent statement of member-partners for
- List of all creditors of the firm along with their consent to conversion.
- Statement of assets and liabilities of the company duly certified by a Chartered Accountant.
- Approval from any other body/authority
- No Objection Certificate (NOC) from income tax authorities.
- Financial statements of the Partnership firm.
- Particulars of court proceedings, if any.
- Rejection letter of RoC in case of any earlier conversion application
How to convert a Partnership firm into an LLP?
The complete process to convert a Partnership firm to an LLP (Limited Liability Partnership) is as follows:
- Obtain the DSC (Digital Signature Certificate) for all the member-partners of the firm.
- Obtain DIN or the DPIN for all the member-partners.
- Fill out the LLC-1 e-form to get approval for the name of the proposed LLP.
- Fill out Form-3 with the complete details of the drafted LLP agreement by the member partners of the firm. Then, attach the original LLP agreement with it.
- Filing Form 17: Member partners must fill out the form to apply for the conversion of the partnership firm. All the individual partners of the firm must sign the declaration.
- The digital signature of every respective partner is required for the same process.
- After submitting the application of conversion and consequently its approval, the Registrar will grant the Certificate of Incorporation to the partnership as an LLP
- All the interests, assets, and liabilities would then be transferred to the LLP.
- The member partners of the newly registered LLP must intimate the Registrar within 15 days of this process.
Also Read: Trademark Opposition – The Best Reply to Clear it in India
Convert your Partnership Firm into an LLP with Registrationwala
We, at Registrationwala, can provide you with the following services in the process of Conversion of Partnership Firm into LLP:
- Firstly, register for and acquire the Designated Partner Identification Numbers (DPINs) and Digital Signature Certificates (DSCs) for your member partners.
- Then, file the name approval application of your firm.
- After that, draft the LLP agreement for the proposed firm.
- Also, collect and compile the required documents for mentioned conversion.
- Lastly, submit the application for conversion along with the documents.
- Also, review the application and make changes if needed.
- Finally, get the Certificate of Incorporation of the LLP.
Registrationwala is one of the leading legal consultancy firms in the country that can assist you in your partnership into an LLP conversion. We do the legwork on your behalf to get you the LLP firm license.
