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Convert Partnership To LLP Registration
Registration in just 10 - 15 Days
No Additional Government Fees
No Govt. Fees
Convert partnership to LLP
Limited Liability Partnerships have an upper hand over the general partnership structure as it is much more beneficial for the partners involved. LLP is a separate legal entity with compulsory registration with the central government, which is not the case with the partnership. It is a business structure that integrates the advantages of the company’s corporate structure and the flexibility of the partnership, i.e. for organizing their internal composition and operation as a partnership. Therefore conversion of partnership firm into LLP is a good business decision to secure the partners’ rights and limit their liabilities.
Benefits of partnership to LLP conversion
Limited Liability of Owners
The liability of Partners is limited to an extent of capital contribution as agreed by the partners in the LLP Agreement. The loss or debt of LLP cannot be assigned to partners even at liquidation. Further, one partner is not held responsible for the actions of negligence or misconduct of any other partner.
separate legal entity
The partnership is not a separate legal entity. In case if the partner(s) dies or retires or in any other case has to leave the firm, the partnership ceases to exist. In this case, a new partnership has to be formed; but this is not the case with a limited liability partnership. Limited liability partnership is a separate legal entity.
Tax benefits
LLP saves the 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.
Raising Capital
Raising Capital is easier in the LLP structure as it allows a limited partner to participate without taking on any accountability, unlike the general partnership where all common partners have unrestrained liability.
Documents needed to convert Partnership to LLP
- Designated partner identification number (DPIN) or Director Identification Number (DIN): Filing an application under DPIN must be obtained for all partners
- Digital Signature Certificate (DSC): This is necessary to apply for digital authentication of the company
- LLP-1: This e-form is needed to be filled to add “LLP” to the existing firm name. The registrar will accordingly verify any resemblance to the existing firm names or trademark registered or pending registration.
- Draft of LLP agreement
- Form-17 with Registrar of Companies (ROC): This is application of conversion is to be filled with the following attachments
- Statement of consent of Partners for conversion
- List of all creditors along with their consent to conversion
- Statement of assets and liabilities of the company duly certified by a CA
- Approval from any other body/authority as may be required. Approval of the governing council for professional firms
- NOC from Income Tax authorities
- Financial statements of the Partnership Company
- Particulars of any court proceedings
- Rejection letter of ROC in case of any earlier conversion application
How can make the payment of the application?
In case company wants to change its registered office within local limits of the same city or place, intimation regarding the same has to be filed in Form INC-22 within 15 days from the date of change i.e. passing Board Resolution.
Following information & documents are required for change in registered office of the Company:-
a) If registered office is changed with in local limits of the same city.
Information
- New address of the Company.
- Name & DSC of the Authorised director for form filing.
Documents
- Board Resolution for the change of registered office of the company.
- NOC from the owner of the company for details of the name of the company which are registered at the same address.
Proof of new registered office of the company (Electricity Bill/Telephone Bill/Lease Deed).
What happens if an application is rejected?
If the registrar is satisfied with the application, it may proceed to issue the certificate of registration. After which, the new LLP formed must submit a form-14 to Registrar of Firms within 15 days informing with whom the LLP was registered.
When does the llp come into effect?
Once the procedure to convert Partnership to LLP comes to complete and the registrar provides the certificate of registration, the firm must follow the rules and regulations as applicable to LLPs.
Will the assets belonging to partnership get transferred to llp with the conversion?
No. For any licenses, permits, registrations, properties, approvals, etc., belonging to prior Partnership Company, the newly formed LLP must follow the required procedures with concerned authorities to transfer the assets.
Are there any formalities to be followed after the llp comes into effect?
The LLP shall ensure that for a period of twelve months commencing not later than 14 days after the date of registration, every official correspondence of the LLP bears the following:
- A statement that it was, as from the date of registration, converted from a firm into LLP
- The name and registration number, if applicable, of the firm from which it was converted