Partnership Firm to LLP
Partnership Firm to LLP
In previous few recent years the conversion of partnership to LLP has been increasing tremendously. The reason behind this is the major advantage in terms of Limited liability, flexibility etc. Conversion from Partnership to LLP gives strain from personal asset of partners to LLP since LLP is hybrid of both the partners. The small size business should always find the structure of entity form that suits their business.
Limited liability, unlimited partners, perpetual succession, limited liability are major incentives that entrepreneur converts partnership entity into LLP. The Advantages of Limited Liability (LLP) form is business outweigh those traditional partnership.
Key Differences between a Partnership and an LLP
Limited Liability Partnership (LLP)
Separate Legal Entity
Personal assets of the partners are also liable it’s, unlimited.
Limited to the extent of their capital contribution.
Books of Accounts
Should be prepared according to the provisions of the Limited liability partnership (LLP) Act 2008.
Number of Members
Maximum 20 And In the case of a banking business, the maximum number is 10.
No limit on the maximum number of partners.
Digital Signature Certificate (DSC)
No such mandatory requirement of digital signature certificate (DSC)
All designated partners of the Limited liability partnership (LLP) should have a Digital Signature (DSC) which is a prerequisite for e-filing of forms.
Important Conditions for Converting a Partnership Firm to LLP.
The conversion of a partnership firm to Limited liability (LLP) shall be done as per Section 55 of Limited Liability Partnership Act 2008.
At the time of conversion from Partnership to LLP, their shall not be new partners and whereas the existing cannot be cease to be partners in firm while filing application of conversion.
Procedure for Conversion of a Firm From Partnership to Limited liability partnership (LLP)
1. Name approval.
Reserve unique name (RUN) Form to be filled on MCA portal for approval of name of LLP. At the time of RUN application two name can be applied in single application by preference wise.
2. Obtain Digital signature certificate (DSC).
DSC is only mandatory for designated partners. A Valid Digital signature certificate (DSC) to complete the process of conversion.
3. Filling forms with ROC.
A. Form 17 for conversion partnership to Limited Liability Partnership (LLP)
1. The following details to be required for filling form with ROC.
2. The documents to be attached with form.
3. Filling form for incorporating Limited Liability Partnership (LLP).
4. Documents to be attached to filling form.
4. Issue of incorporation form of LLP
On Approval of application the certification of registration has be to generated by registrar.
5. Form-3 Submissions.
Submit the form-3 on generation of LLP registration certificate. Form-3 contains the LLP agreement signed by all partners with their witness. And form-3 should be filled within 30 days of LLP Incorporation.
6. Intimation from ROC.
Once form-3 gets Approved by roc. Roc will intimate by Email on registered email id.