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.
Overview
Key Differences between a Partnership and an LLP
| Basis | Traditional Partnership | Limited Liability Partnership (LLP) |
|---|---|---|
| Separate Legal Entity | No. | Yes. |
| Liability | Personal assets of the partners are also liable it’s, unlimited. | Limited to the extent of their capital contribution. |
| Books of Accounts | Not mandatory. | 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.
- A valid digital signature certificate (DSC) is mandatory for all partners and at least any two of the partner should have DPIN before making application for conversion.
- The firm converted from partnership to Limited liability Partnership (LLP) Under partnership act 1932.
- The process from partnership to LLP requires consent of all partners.
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.
Documents Checklist
Documents required for conversion of from Partnership to LLP.
1. Documents required for Incorporating Section 8 Company is as follow:
2. ID proof of proposed Directors and members (anyone):
3. Address proof of proposed members and directors (anyone):
4. Address proof for the principal place of business of the proposed company (anyone)
Additional Documents required.
- Statement of consent of all partners for conversion of partnership to LLP.
- Statement of assets and liabilities of partnership firm certified by Chartered Accountant in who should be in practice.
- Copy of the latest Income Tax Return acknowledgement.
- List of all the secured creditors along with their consent.
Procedure for Incorporation
- Fill the application and Submit to our executive with proper Documents and Make payment.
- Company Name Approval within 3 working days.
- Making Digital Signature certificate for director 1 working days.
- Documents preparing for incorporation within 2 days.
- Applying for company incorporation 8 days.
- Congratulation your Nidhi Company has been incorporated.
Benefits
Benefits of Starting a Nidhi Company
The main motive of establishing Nidhi Company is to encourage member to save so that they can fulfill their own financial requirement which arises them time to time. So that they become self-sufficient and can fulfill all future expenses that may come up. And other benefits of registering are mentioned below.
There are several more advantages to forming a Nidhi company. Few of them are mentioned below:
A. Less Regulations.
RBI imposed a very few Guidelines in Nidhi companies. Nidhi companies are governed under the Nidhi rules 2014 and its activities and operations are controlled by central government.
B. Limited Liability.
In case if Nidhi Company suffers from any financial distress in course of business then the personal property of directors and members are not at risk. Liability of shareholders and Directors are limited.
C. Better Credibility
Nidhi companies enjoys the benefit of better credibility based on trust cooperative or NGOs.
D. Easy Access of Public funds
The from from Nidhi companies are Cheaper than banks and Other NBFCs companies for it’s shareholder. And the process for taking loan from this Banks And are easier and quicker.
E. Ease of fund.
For Inviting deposits from general public, Nidhi company is the cheapest wa. We just need to take them as registered member.
F. Easy Registration Process.
The process of registering a Nidhi company is very easy and simple with setupfilings you can register your Nidhi Company. You will not have to take seprate license from RBI. Simply we have to register a public limited company with MCA.
G. Simple processing
Lending and Borrowing to know person which belongs to same group of people is much less complicated than dealing with bank where loan procedure is very hassle and fixed.
H. Separate entity.
Nidhi Company can purchase assets and Lend to other, Nidhi company can be sued or sue other, It has separate legal entity.
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.
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
6. Intimation from ROC.
Once form-3 gets Approved by roc. Roc will intimate by Email on registered email id.
3. Filling forms with ROC.
A) form 17 for conversion partnership to limited liability partnership (LLP)
- The following details to be required for filling form with ROC.
- SRN number of RUN form of name approval,
- Proposed name of LLP, Name, address, registration
- partnership agreement details of the firm,
- Details regarding the number of partners,
- capital contribution to be provided,
- Secured creditors details.
- The documents to be attached with form.
- Statement of consent of all partners for conversion of partnership to LLP.
- Statement of assets and liabilities of partnership firm certified by Chartered Accountant in who should be in practice. c) Copy of the latest Income Tax Return acknowledgement.
- List of all the secured creditors along with their consent.
- Any other supporting information (optional).
Fillip form for incorporating Limited Liability Partnership (LLP).
- SRN of RUN which will auto filled the approved name of LLP.
- Address of Registered office and Email-ID which is to be registered with LLP.
- Nature of business, Details of the partners, designated partners, their PAN and DPIN
- Contribution of partners.
Documents to be attached to fillip form.
- Documents of registered office of LLP
- Details of any Limited Liability partnersip (LLP)/Company where a designated partner is also a director/partner of any entity.
- Identity proof of partners and their proof of address.
Process
Get the process done in 5 Easy Steps
FAQ's
Answer: Address proof of the office
- Regulatory authority’s approval
- Details of all the partners and directors
- Consent of all the partners and directors
- Latest income tax return filing
- NOC from tax authorities
- Creditors and their consent
- Certified liabilities and assets of the partnership
Answer:
- All the partners must obtain a DSC
- Next, they must obtain a designated partner identification number
- Once this is done, the company must look to get their name approved
- The name must include LLP at its end
- File LLP forms 17, 2, and 3.
Answer: At least seven partners.
- Share capital worth at least INR 1 lakh
- Capital must be divided into either units or shares
- Object Clause from the partnership firm’s Memorandum of Association
- DSC and DIN of all the partners
- Memorandum of Association of the partnership
- Articles of Association
- Copy of the application for name approval
- NOC from the property owner
Answer: It will take 20 to 25 days to convert Partnership firm to LLP.
Answer: No. it is not mandatory to present in office during process.
