More and more partnership firms are being converted into a Limited Liability Partnership (LLP). LLP offers a lot of features such as unlimited partners, limited liability protection, transferability, survivability, etc., – making it more attractive than a partnership firm.
After the existence of one year of partnership firm form date of agreement/ incorporation date, partnership form can go for convert into LLP
Procedure for conversion of Partnership Firm into LLP
Partners in a Partnership Firm shall necessarily have Digital Signature as it will be required for filling up of various Forms. So the Partners shall make arrangements to obtain Digital Signature.
DIN or DPIN
Partners registered in a partnership firm do 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
Name Approval through RUN
The Reservation of the name of the LLP must be obtained before filing the forms for the conversion of the Partnership Firm into LLP. As when we will file Form-17 (for conversion
Filing LLP Form 17
A person must file LLP Form 17 whats along with the incorporation application and subscribers sheet while converting a partnership firm into an LLP.
The following documents the LLP 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 acknowledgment of the latest income tax return.
Approval from any regulatory body/ authority, in case applicable approvals from the concerned body/ authority or authorities is required and have been obtained);
List of all the secured creditors along with their consent to the conversion (Mandatory in case consent of all the secured creditors for the conversion of the firm into limited liability partnership has been);
Clearance or No Objection Certificate from Tax Authorities;
Filing for Incorporation & Conversion of Partnership into LLP
For the conversion of Partnership Firm into LLP, along with LLP Form 17, LLP Form -Filip and LLP Form, 3 must also be filed. LLP Form 2 contains the incorporation document and subscriber’s statement.
Along with LLP Form Filip,
The following documents must be submitted:
Proof of address of registered office of LLP;
Subscribers’ sheet including consent;
In-principle approval of regulatory authority, if required
Detail of LLP(s) and/ or company(s) in which partner/ designated partner is a director/ partner (if any).
A person can file this form after the conversion of the Partnership Firm into LLP or while filing for the conversion of Partnership Firm into LLP. Then attach the LLP Form 3 with the LLP Agreement.
Successful Conversion of Partnership into LLP
On the successful conversion of a Partnership Firm into LLP, the Registrar would give Certificate of Incorporation of LLP. Once, the LLP is incorporated and the Partnership Firm is converted, the Partnership Firm would be deemed to be dissolved. Further, on the conversion of Partnership into LLP, all properties, assets, interests, rights, privileges, liabilities, obligations of the firm are transferred to the LLP. In other words, the whole of the undertaking of the firm is transferred to the LLP.
However, any approvals, permit, or license issued under any written law to the Partnership Firm will not be transferred automatically to the LLP. Therefore, fresh licenses or registrations may be required. Before the conversion process, it is necessary to consider the aspect of the conversion of Partnership into LLP
After incorporation of LLP final form 14 should be filed to ROC (Form for intimating to Registrar of Firms about conversion of the firm into limited liability partnership (LLP).