Convert Partnership to LLP in India

A company where two or more people share ownership of the business is a partnership company. In a partnership company, each partner contributes to all aspects of the business. The partners also share the profits and losses of the business. Whereas LLP, which is limited liability partnership, is a company where all partners have limited liabilities. Here, one partner is not responsible for other partners’ diligence or negligence.

Therefore, those of you who want to be on the safe side when doing business, it’s a good idea to convert your Partnership into a Limited Liability Partnership. By doing so, you’re going to combine the partnership aspect of a firm with the Limited Liability Aspect of a company.

Advantages of LLP

• Limited liability protection is one of the main advantages that make partners look for conversion from Partnership to LLP.
• It is an interesting and top choice for small and medium sized businesses as it is a great way to bring business synergies together.
• It forms a simple working condition limiting liability to partners.
• The existence and running of LLP does not solely depend on either of the partner. For example, with the demise of a partner in Partnership Company may cause the company to disintegrate. Whereas, in LLP, it may not cease to exist in such a case. The partners of an LLP may keep changing from time to time and it will not affect the LLP’s continuity.
• The liability of partners in LLP is limited to the amount of capital invested and there is no minimum limit to the amount of capital to be invested.
• In a partnership firm, minimum number of partners is two and maximum is limited to ten. However in LLP, there is no upper limit to number of partners.
• LLP’s can be merged with other LLPs unlike Partnership Companies.

Eligibility Criteria to Convert Partnership into an LLP in India

Before you’re allowed to convert partnership into an LLP, you must fit the following criteria

·         All the partners should consent to decision to convert

·         You should have cleared all the liabilities that you have as a partnership firm.

·         If you’ve acquired any type of business certification under the name of the partnership firm, you need to acquire consent from the certifying authority as well.

·         Consent from the suppliers of the partnership firm is also required.

Documents Required for converting a partnership firm into an LLP in India

• 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

Process for converting partnership firm into an LLP in India

The process to convert a partnership firm into a Limited Liability partnership is as follows:

·         First, you must get approval to use the name of the partnership firm for the LLP.

·         After acquiring the approval, you must gain the digital signatures of the designated partners.

·         Then, you must draft a FORM-17 with the Registrar of Companies. It’s called the application of conversion.

·         Obtain the consent from the partners, suppliers, investors and from those to whom you once owed any type of debt to.

·         Create a statement of all the assets and liabilities

·         Fill the form for incorporation of LLP online

·         Obtain the Certificate of Incorporation of the LLP

·         Draft an LLP agreement using the points mentioned in the partnership deed.

·         Within 15 days of conversion from Partnership to LLP, intimate the Registrar of Firms about the conversion.

Our Assistance to covert your partnership into LLP in India

We, at Registrationwala provide end to end solutions for conversion from partnership to LLP. Our services include:

·         DIN, DSC & Name Approval

·         Submission of Form

·         Reviewing the application and making changes if needed

·         Obtaining Certificate of Incorporation

·         Drafting the LLP agreement

Registrationwala.com is a leading legal consultancy firm providing the comprehensive services relating to partnership to LLP conversion. We do the legwork necessary to give the Limited liability factor to your standard partnership firm.

So, take your first steps towards this conversion and reach out to us.