Business Conversion

Fee Structure

Partnership to LLP
Total : 38990/- INR


CONVERSION OF PARTNERSHIP FIRM INTO LLP

The shift from traditional partnerships to Limited Liability Partnerships (LLPs) has increased in recent years. The reason behind this is that LLPs offer more flexibility, unlimited partners and the like. But the real driving force behind the shift is due to the fact that LLPs offer a major advantage in terms of limited liability. The strain on the personal assets of the partner is put to rest when it comes to LLPs since they are a hybrid of both a partnership and a private limited company. Small and medium-sized businesses find this type of organisation structure to suit their needs very well.

The advantages of the Limited Liability Partnership (LLP) form of business outweigh those of the traditional partnership. Limited liability, perpetual succession and unlimited partners are the key incentives for a partnership firm to convert itself into an LLP.

 Why LLP is better than Partnership Firm

  • There is no limit to the number of partners in an LLP; a partnership willing to have more than 20 partners can benefit through this.
  • The liability of the partners is limited to the amount of capital contributed.
  • There is no limit on the minimum amount of capital to be contributed.
  • LLP is a Body Corporate.
  • LLP has perpetual succession, unlike partnership which depends upon the will of the partners Separate legal entity.
  • LLPs enjoy higher creditworthiness compared to Partnerships; therefore they can obtain better financing.
  • Complete flexibility in managing the business, partners may run the business according to the terms defined in the LLP Agreement.
  • Foreign Direct Investment (FDI) in LLPs allowed.
  • Now, multidisciplinary LLPs are allowed wherein professionals of varied disciplines can work together which is an exclusive advantage of LLP.
  • Further CA firms are now allowed to convert themselves into LLP and increase their scale of operations.
  • LLP structure is also suitable for PE funds, joint ventures and venture capital funds which is not the case in partnership form.
  • LLPs can enter into compromise, arrangement, merger or amalgamation with other LLPs whereas partnerships cannot merge with other firms 

Conditions for Conversion of Partnership Into LLP

  • The firm may or may not be registered with the Registrar of Firms.
  • There should be the consent of all the Partners.
  • All the Partners become a partner in the LLP, in the same proportion in which their capital accounts stood in the books of the Firm on the date of the conversion.
  • Every partner should contribute to the LLP.
  • DIN should be acquired for all the designated Partners.
  • DSC (Digital Signature Certificate) should be acquired for at least one Designated Partner.

Key Requirements for Conversion of Partnership Firm Into LLP

  • Up to date filing of Income tax returns
  • Consent of all the unsecured creditors for the proposed conversion
  • Minimum 2 Designated Partners
  • At least 1 of the designated partners shall be an Indian Resident.
  • The Partners and Designated Partners can be the same person.
  • There is no concept of share capital, but there has to be some sort of contribution from each partner.

 

Steps for the Conversion of Partnership Firm to LLP

  1. Requirement of Digital Signature: Partners in a Partnership Firm shall necessarily have Digital Signature as it will be required for filling up various Forms. So the Partners shall make arrangements to obtain Digital Signature.
  2. Requirement of DIN or DPIN: Partners registered in a partnership firm does not generally have DIN (Director Identification Number). DIN is a unique number issued by the Central Government. This number is issued to a person only once and can be used by the person throughout this life without any compliance.
  3. Name Approval: After the DIN availability process is over, a person can apply for the Name reservation of the proposed LLP through the Ministry of Corporate Affairs. The Reservation of the name of the LLP must be obtained before filing the forms for conversion of the Partnership Firm into LLP. As when we will file Form-17 (for conversion) SRN will be required of the Name Reservation (RUN) of LLP.
  4. Filling of Form-Fillip: Form for Incorporation of Limited Liability Partnership. If the partners do not have DIN we can apply for an application of DIN (Maximum 2) in the Form- Fillip.

Documents and information required for Form- Fillip:

  1. Name of Proposed LLP
  2. DSC of Designated Partners
  3. Capital of Proposed LLP and Contribution of Proposed Partners
  4. Phone No. and E-Mail Id of Proposed Partners
  5. Voter Id Card/Driving Licence/Passport of Proposed Partners
  6. Latest Utility Bill (Not Older Than 2 Months)(for Registered Office)
  7. Registered Office Proof (Index-2/ Allotment Letter/ Possession Letter/ Sale Deed/ Rent Agreement)
  8. PAN of all Designated Partners/ partners
  9.  Bank Statement of Designated Partners/ partners

Attachments for Form Fillip:

  • Subscriber Sheet Including Consent.
  • Proof of Address of Registered Office of the LLP which includes NOC of the Owner.
  • Proposed Main Object.
  • Details of LLP or Company if the proposed Designated Partner /Partner is Director or Partner of any other Company or LLP respectively.
  1. Filling of Form-3: Information with regard to the limited liability partnership agreement and changes, if any, made therein.

Attachments

  • LLP Agreement.
  1. Filling of Form-17: Application and a Statement of the Conversion of Partnership Firm into LLP (Limited Liability Partnership) i.e., Form 17. This form includes a Declaration by a Partner of the Partnership Firm. And shall be Digitally Signed by a Partner and Certified by a Company Secretary in whole-time practice/Chartered accountant in whole-time practice/ Cost accountant in whole-time practice

Attachments in Form-17:

  • Statement of the consent of partners of the firm.
  • Statement of Assets and Liabilities of the firm duly certified as true and correct by the Chartered Accountant in practice.
  • Copy of acknowledgement of latest income tax return.0
  • List of all the secured creditors along with their consent to the conversion.

On successful conversion of Partnership Firm into LLP, the Registrar would then issue a Certificate of Incorporation of LLP and all the properties, assets, interests, rights, privileges, etc. of the firm are now transferred to the LLP. In other words, the complete undertaking of the firm is transferred to the LLP.

However, any approvals/permit/license that is issued under any law to the Partnership Firm will not be automatically transferred to the Limited Liability Partnership. Therefore, fresh licenses or any registrations may be required.

 

Service Delivery Process followed by White Code Legal:

  1. The Client has to register themselves on our website.
  2. Once the Client is registered, we raise a Service Request.
  3. The Client receives a proforma invoice with an option to confirm and pay now or pay later.
  4. Once the Client confirms, our dedicated relationship manager liaisons with our experts and clients share a list of client information required to deliver the service.
  5. Once we receive the information, we take the required steps to deliver the service and the service request is closed.

Service Inclusions

  • Professional Fees

Service Exclusions

  • GST, Government Fee, and other Additional Taxes

Why White Code Legal? 

At White Code Legal we prioritize and always strive to deliver service as per client satisfaction. Keeping the focus on maintaining affordable prices and delivering excellence we aim to make worth every penny our clients spend with us and build a lasting relationship with them.