Convert Partnership to LLP
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.
Advantages of LLP (Heading)
- 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.
Documents needed to convert Partnership to LLP (Heading)
- 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