CONVERSION OF PARTNERSHIP TO LIMITED LIABILITY PARTNERSHIP (LLP)
In contrast with a standard Partnership, a limited liability partnership (LLP) can be demonstrated to be a far superior business structure. Individual liabilities affect partnerships, and LLPs get rid of the Indian Partnership Demonstration of 1932’s tyrannical prerequisites. Furthermore, there are charge benefits, no review commitments under a particular capital edge, no partner cap, and no capital commitment limitations. Peruse to find out about switching the partnership over completely to LLP.
ADVANTAGES OF CHOOSING AN LLP REGISTRATION:

Numerous Partnership firms today go for an LLP firm registration on account of different advantages, for example,
- Life span or Perpetual Succession of an LLP
Working with an LLP firm is different from a Partnership firm. Indeed, even after the demise of the partners, the Partnerships will in any case exist and work like previously. The advantage of Perpetual Succession is the benefit of why Partnership firms go for LLP enlistment in India.
- No Minimum Capital for Registration
You can start an LLP firm by financial planning any measure of capital. There is no base capital prerequisite in beginning an LLP firm. Partnership firms with limited capital ought to go for an LLP firm.
- No mandatory Auditing
An LLP firm isn’t expected to get its records inspected consistently. Notwithstanding, an LLP firm needs to get its records reviewed in the accompanying two circumstances:
- Contributions made by LLP firm surpassing INR 25 lakhs and
- Annual turnover of LLP firm expanding by INR 40 lakhs
It is easy to do LLP Annual Filing Online on the official site.
Eligibility Criteria for the Conversion of Partnership firm to Limited Liability Partnership (LLP):
- The LLP must have the very individuals as partners that shaped the first Partnership firm.
- The extent of capital in the book of the firm must be equivalent to the first Partnership on the date of conversion.
Kindly note here that any progressions in the number of partners are permitted solely after changing from a Partnership to a Limited Liability Partnership LLP in India.
Other Conditions for Changing over Partnership Firm to Limited Liability Partnerships:
- Section 55 alongside Schedule II of the Limited Liability Partnership Act 2008 arrangements with the conversion technique of a Partnership firm to a Limited Liability Partnership.
- During conversion, every one of the current Partnership firm partners continues as before. No partner can exit or no new partner can be conceded while applying for an LLP.
- At the hour of applying for an LLP every one of the partners should hold a Digital Signature Certificate (DSC) and at least two partners should have a DPIN.
- The first partnership firm’s absolute requirement was enrolled under the Partnership Act, of 1932.
- Every one of the partners should give their agreement to the conversion of the partnership firm to the LLP.
List of Documents expected for the Conversion of the Partnership Firm to a Limited Liability Partnership (LLP):
- PAN Card of all partners and the firm.
- Passport (in case of foreign nationals and NRIs)
- Aadhar Card, Voter ID Card of all the partners.
- Passport-size photos of all the partners.
- Electricity/ Water Bill of the registered place of business.
- Rent Agreement of the registered place of business (in case of rented property)
- No Objection Certificate from the owner of the registered place of business (in case of rented property)
Steps to be followed to Covert a Partnership Firm into an LLP:
Stage 1 – Digital Signature:
Regularly the Partners in a Partnership Firm don’t have a computerized signature since it isn’t required for the enlistment of a Partnership firm. Nonetheless, on the off chance that the partners choose to change over the Partnership Firm into an LLP, the Digital Signature Certificate (DSC) is a compulsory prerequisite for every one of the Partners.
Stage 2 – Prerequisite of DIN or DPIN:
The Partners in an LLP or the Chiefs in a Confidential Limited Partnership require a DIN/DPIN. A Noise is a special number that is given to each partner or overseer of an LLP. Once, a DIN/DPIN is given, it very well may be utilized with practically no restoration or any consistency petitioning for the lifetime.
Stage 3 – Finishing the Name Approval:
Once, two DIN /DPINs are accessible, an application for name reservation of the imminent Partnership can be made to the Ministry of Corporate Affair. The Booking of the name of the LLP should be gotten before documenting the structures for the change of the Partnership Firm into LLP.
Stage 4 – Filing LLP Form 17:
Application and a Statement of the Conversion of the Partnership Firm into LLP (Limited Liability Partnership) i.e., Structure 17 ought to be documented alongside the joining application. The supporter’s sheet ought to likewise be recorded while changing over a Partnership firm into an LLP. In the wake of filling the structure 17 the referenced reports ought to be compulsorily appended to it:
- A Explanation of the assent of partners of the firm.
- A Explanation of the resources and liabilities of the firm which is properly ensured as a genuine duplicate by a rehearsing Sanctioned Bookkeeper.
- A duplicate of the latest income tax return (Required) acknowledgment.
- Approval from any administrative body/authority (Obligatory).
- Prepare a list of all the secured creditors along with their consent to the conversion. It is Mandatory in case the consent of all the secured creditors for the conversion of the firm into a limited liability partnership has been.
- A Clearance or No Objection Certificate (NOC) from the Tax Authorities.
Once, LLP Form 17 is filled it should be digitally signed by a Designated Partner from a professionally practicing Chartered Accountant/Cost Accountant/Company Secretary.
Stage 5 – Filing for Incorporation and Conversion of Partnership into LLP:
For the Change of a Partnership Firm into LLP, LLP Structure 2 and LLP Structure 3 must likewise be recorded. LLP Structure 2 contains the consolidation report and the endorser’s assertion alongside the accompanying joined records:
- Proof of address of the registered office of the LLP.
- The Subscribers’ sheet with consent.
- In- principle approval of the regulatory authority, if required.
- The Subtleties of LLP(s) as well as company(s) in which the partner/assigned partner is a director/partner (if any).
LLP From 3 contains the underlying Limited Liability Partnership Understanding. This structure can be documented once the Partnership Firm is changed over into an LLP or while petitioning for the conversion of the Partnership Firm into an LLP. The LLP Understanding should be joined to the LLP From 3.
EFFECT OF REGISTRATION:
- An LLP will appear by the name expressed in the endorsement of registration.
- All the assets, liabilities, rights, and obligations that are vested in the firm will vest in the LLP.
- The firm will stand to break down, and on the off chance that it was enrolled under the Indian Partnership Act 1932, it will be eliminated from the records kept up with.
- All procedures which were forthcoming against the firm might be upheld against the LLP.
- Any request or judgment either in favor or against the firm might be authorized against the LLP.
- Every single existing agreement and arrangement wherein the firm was a party will keep on being in force with the LLP as the party.
- Each current arrangement of the firm or authority presented on the firm will be as though it were given on the LLP.
POST CONVERSION IMPORTANT POINTS:
- Till a time of a year starting not later than 14 days after the date of registration, each official correspondence ought to bear the accompanying:
- An explanation that it was changed over into an LLP;
- The name and the enlistment number, if material, of the Partnership firm;
- All procedures by or against the firm which are forthcoming with any Court, Council, or any authority might be proceeded, finished, and upheld by or against the LLP.
- Every current understanding and agreement will be legitimate to such an extent that it was placed into with the changed over LLP or such LLP was involved with the said arrangement and agreement.