A firm where two or more people share ownership of the business is a partnership firm. In a partnership firm, each partner contributes to all aspects of the business. The partners also share the profits and losses of the business. An LLP, a Limited Liability Partnership, on the other hand, is a business arrangement where all partners have limited liabilities. One partner is not responsible for the other partner’s diligence or negligence.
Therefore, for those 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.
Can a Partnership be converted into LLP? Yes, you can. But before you’re allowed to convert a partnership into an LLP, you must fit the following criteria
· Designated Partner Identification Number (DPIN): 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
· Form LLP-1: This E-form must be filled to add “LLP” to the existing firm name. The registrar will accordingly verify any resemblance to the existing firm names or trademarks registered or pending registration.
· Draft of LLP agreement
· Form-17 with Registrar of Companies (ROC): This is an application of conversion that must be filled with the following attachments
Ø Statement of the consent of Partners for conversion
Ø List of all creditors along with their consent to conversion
Ø Statement of assets and liabilities of the company duly certified by a CA
Ø Approval from any other body/authority may be required. Approval of the governing council for professional firms
Ø NoC from Income Tax authorities
Ø Financial statements of the Partnership Company
Ø Particulars of any court proceedings
Ø Rejection letter of ROC in case of any earlier conversion application
Can a Partnership be converted into LLP? Yes. And the process to convert a partnership firm into a Limited Liability partnership is as follows:
Step 1: Name Approval
First, you must get approval to use the name of the partnership firm for the LLP.
Step 2: Obtain DSCs
After acquiring the approval, you must gain the digital signatures of the designated partners.
Step 3: Apply for Conversion
You must draft a FORM-17 with the Registrar of Companies. It’s called the application of conversion.
Step 4: Get consent
Obtain consent from the partners, suppliers, investors, and from those to whom you once owed any type of debt.
Step 5: List assets
Create a statement of all the assets and liabilities.
Step 6: Apply for Incorporation
Fill out the form for incorporation of LLP online.
Step 7: Certificate grant
Obtain the Certificate of Incorporation of the LLP.
Step 8: LLP Agreement
Draft an LLP agreement using the points mentioned in the partnership deed.
Step 9: RoF intimation
Within 15 days of conversion of Partnership to an LLP, intimate the Registrar of Firms about the conversion.
We at Registrationwala provide end-to-end solutions for the conversion of a Partnership to an LLP. Our services include:
Registrationwala.com is a leading legal consultancy firm providing comprehensive services relating to a partnership firm 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.