Partnership to LLP
If you want to convert your partnership to LLP, it is possible to do it under the LLP Act, 2008.
What are the benefits of converting Partnership to LLP?
After converting your partnership to LLP, you have the following benefits.
- Limited liability of partners.
- No limit on number of members.
- Perpetual succession so coming and going of partners does not affect the LLP.
- Ownership becomes transferable.
Is it Possible to convert any LLP to Partnership?
Before conversion into an LLP, a partnership needs to fulfill some conditions.
Each partner should consent to the conversion.
The LLP should only comprise of partners from the earlier partnership and no one else.
All assets and liabilities of the firm should be transferred to the firm.
What is the Procedure to convert Partnership to LLP?
It involves the following steps.
- Getting a digital signature certificate.
- Applying for Designated Partner Identification Number (DPIN).
- Name approval from the MCA.
- Appointing designated partners.
- Filing Form 17 and Form 2 for LLP conversion.
- Submitting supporting documents.
- Filing Form 2 after approval of Form 17.
What documents do I need?
You need the following documents:
- Statement of Partners
- Subscription sheet signed by the promoters;
- Certified true copy of Statement of Assets and Liabilities.
- An LLP Agreement
- Proof of Address of Registered Office
- List of all unsecured creditors along with their consent to conversion;
- A clearance / No objection certificate from Tax Authorities.
What is the fee?
The government fee starts from Rs. 500 and goes up to Rs. 5000, depending on the contribution. The professional fee starts from Rs. 3500
What happens after the Conversion?
Your partnership is now a registered LLP. But every partner of the converted firm is personally liable for all obligations that took effect before the conversion.
Also, for 12 months after the conversion, every official correspondence of the LLP must indicate that it has been converted into an LLP.
Any existing licenses or permits in the name of the partnership will not automatically transfer to the LLP. The LLP also needs to apply to the relevant authority for transferring ownership of properties registered in the name of partnership firm.
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