CONVERSION OF PARTNERSHIP INTO LLP
In 2008 Parliament of India enacted the Limited Liability Partnership Act, 2008.
Limited Liability Partnership is separate from its partners is a body corporate and legal entity having perpetual succession. The existence, rights, or liability of the LLP shall not be affected by any change in the partners of a Limited Liability Partnership.
Indian Partnership Act, 1932
The partnership is the relation between persons who have agreed to share profits of a business carried on by all or any of them acting for all.
Below Mentioned is the Eligibility Criteria for the conversion of Partnership Firm into LLP:
In order to convert the partnership into LLP, Partnership must be registered under the Indian Partnership Act 1932. The name of any other Statute under which it is registered has to be mentioned at the time of conversion if the firm is not registered under the Indian Partnership Act, 1932.
Process/Steps for Conversion of Partnership Firm to LLP.
Step 1: Requirement of Digital Signature:
All the Partners of a Partnership Firm shall mandatorily have Digital Signature as the same will be required for filling up of various Forms.
Step 2: Requirement of DIN or DPIN:
The Partners in an LLP require a DIN / DPIN. A DIN is a unique number issued to every partner or a director of an LLP. A DIN/DPIN is issued with a lifetime validity i.e. no renewal or any compliance filing is required for the lifetime.
Step 3: Name Approval:
After getting DIN/DPIN, an application for name reservation of the LLP can be made to the Ministry of Corporate Affair. Before filing the forms for the conversion of the Partnership Firm into LLP a reservation of the name of the LLP must be obtained.
Step 4: Filing LLP Form 17:
Application and a Statement of the Conversion of Partnership Firm into LLP (Limited Liability Partnership) i.e., Form 17 should be filed along with the incorporation application. A subscriber’s sheet is also needed to be filed while converting a partnership firm into an LLP. After the filling of form 17 below-mentioned documents in step 5 should be mandatorily attached to it:
Step 5: Filing for Incorporation & Conversion of Partnership into LLP:
For the Conversion of a Partnership Firm into LLP,
LLP Form 2 – This form contains the incorporation document along with the Subscribers’ sheet with consent.
LLP Form 3 – contains the initial LLP Agreement.
In order to file LLP Form 2 the following documents must be attached:
- Proof of address of the registered office of the LLP.
- The Subscribers’ sheet with consent.
- In principle, if required, approval of the regulatory authority.
- The Details of LLP(s) and/ or company(s) in which the partner/ designated partner is a director/ partner (if any).
Successful Conversion of Partnership Firm into LLP
After completing the process of conversion of the Partnership Firm into LLP, the Registrar would issue a Certificate of Incorporation of LLP and all the properties, assets, interests, rights, privileges, etc. of the Partnership firm are now transferred to the LLP.
Documents and information required for Conversion of the firm to LLP
- Name of Proposed LLP
- DSC of Designated Partners and Proposed Partners
- Capital and Contribution of Proposed Partners
- Phone No. and E-Mail Id of Proposed Partners
- Voter Id Card/Passport /Driving Licence of Proposed Partners
- Utility Bill for registered office not Older Than 2 Months
- Registered Office Proof (Index-2/ Allotment Letter/ Possession Letter/ Sale Deed/ Rent Agreement)
- PAN of all Partners
- Bank Statement of Partners
Attachments in Form-17:
- A Statement containing consent from all partners of the firm.
- Statement of Assets and Liabilities of the firm duly certified by the Chartered Accountant in practice.
- the latest acknowledgment of income tax return.
- Details of all the secured creditors along with their consent to the conversion.
- No Objection Certificate (NOC) from the Tax Authorities.
After form LLP-17 is filled it must be digitally signed by a Designated Partner from a professionally practicing Chartered Accountant/Cost Accountant/Company Secretary.
