Partnership Of LLP
Conversion Of Partnership Into LLP
As an entrepreneur, India offers you many options to select a business. You can choose among various
forms of businesses but before choosing the form of business, you must know the requirements, advantages & disadvantages of all these forms of business. You need to check that which form of business benefits you the most. If we talk about partnership, one of the biggest disadvantages of this form of business is unlimited liability. It means personal assets of the partners are at high risk but many forms of business provide you the advantage of limited liability too. For ex – LLP & Private limited company.
Entrepreneurs now days’ converting the partnership firms to LLP’s to prevent risk of unlimited liability.
There are many reasons for converting partnership firm into an LLP and they are as follows –
LLP is very popular among small & medium sized businesses. Any partnership firm want to convert into LLP
must be registered under India partnership act, 1932. Partnership firms who are not registered under Indian
partnership act 1932 cannot convert partnership firm into LLP.
1 Separate legal entity
2 Unlimited number of partners
3 Limited liability
4 Ease of ownership transfer
What Is Included In Our Package?
Minimum Requirements To Convert Partnership Firm Into LLP
1 Minimum 2 partners
2 DPIN for all partners
3 DSC for all partners
4 One designated partner should be an Indian citizen
5 Consent from all unsecured creditors for conversion in LLP
6 The partners shall receive consideration only by way of allotment of shares in LLP.
7 There should be some sort of contribution from every partner
8 Up to date submission of income tax returns.
Advantages Of Converting Partnership Firm Into LLP
Separate legal entity
Set up cost is low
Procedure Of Converting Partnership Firm Into LLP
The procedure of converting partnership firm into LLP is as follows –
Set up cost is low
Procedure Of Converting Partnership Firm Into
Step 1 – In the first step, make sure you have DSC (Digital signature certificate)
while converting a partnership firm into an LLP. This is the first compulsory requirement to convert partnership firm into an LLP. If you are not having DSC, apply for it as early as possible as the same is required for all the partners.
Step 2 – In the next step, you have to obtain a DPIN (Designated partner identification number). It is also
a mandatory requirement for at least 2 partners to proceed further with the conversion process. DPIN is
a unique number given to each person holding position of LLP partner or director. It is issued for a
lifetime without any renewal.
Step 3 – In the third step, you have to select the name for an LLP and apply for name approval with
ministry of corporate affairs (MCA). Selection of name is not an easy task and it should be selected
carefully. It should be unique & limited liability partnership (https://www.finacbooks.com/llp-registration)
must be used at the end of the company’s name.
Step 4 – After getting the name approval from MCA in step-4, you have to file LLP form 17 along with the
incorporation application as well as subscribers sheet to convert a partnership firm into LLP. The
following documents mentioned below must be mandatorily attached with LLP form 17 –
1 Copy of acknowledgement of latest income tax return
2 Statement of assets & liabilities of the firm certified by any chartered accountant of India
3 Statement of consent of partners of the firm
4 List of approval of all the secured creditors for converting a partnership firm into LLP.
5 No objection certificate from tax authorities.
6 Approval from any regulatory body/authority
Step 5 – In the fifth step, LLP form 2 & LLP form 3 is also to be filed along with LLP form 17. LLP form 2
includes incorporation document and subscriber’s statements. The following documents mentioned
below must be submitted along with LLP form -2 -
1 Proof of registered office of LLP
2 Approval of regulatory authority (If required)
3 Subscriber’s sheet including consent
4 Details of LLP/company in which person is a director or a partner.
Step 6 – After successfully filing all the documents along with the prescribed fees, the certificate of
conversion will be issued by registrar after verifying all the documents.