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Partnership To LLP

Partnership To LLP

No partnership firm registered under the Partnership Act, 1932 have been converted into Limited Liability Partnership after the introduction of LLP Act, 2008 due to more benefits like minimal compliances, tax advantages, limited liability, separate legal entity, etc. are involved with LLP format of business entity. Unregistered partnerships cannot be converted into LLP.

More and more partnership firms are being converted into a Limited Liability Partnership (LLP). LLP offers a host of features such as unlimited partners, limited liability protection, transferability, survivability, etc.,  – making it more attractive than a partnership firm. In this article, we look at the procedure for conversion of Partnerships Firm into LLP in a step by step manner.

<strong>Requirements for conversion:

  • All the partners of the partnership firm will become the designated partners of new LLP, and consequently, those who do not wish to continue to be the partner in LLP should retire.
  • Designated partners who want to be the partner in LLP should be added after the incorporation of LLP.
  • All the designated partners should be updated with their income tax returns.
  • All designated partners should apply for Digital Signatures.
  • All designated partners should make some contributions.
  • All creditors should give their consent for conversion.

Procedure for the conversion:

  • Approval of name for LLP in prescribed form.
  • File an application for conversion of a partnership into LLP.
  • File necessary firms of registered office and consent from each partner to become a designated partner in new LLP with ROC.
  • File LLP Agreement within 30 days with ROC.
  • Issuance of Certificate of Registration by ROC.
  • Send intimation to ROC regarding the conversion of a partnership into LLP

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