Overview of Converting Partnership into LLP with MyCAbuddy
Limited Liability Partnerships (LLPs) operate under the LLP Act, 2008, and the conversion process from partnership to LLP is governed by the Second Schedule of the LLP Act. Understanding the reasons for converting a partnership firm into an LLP is crucial for entrepreneurs looking to make this transition.
One key requirement for converting a partnership into an LLP is that the LLP formed must have the same partners as the original partnership. Adding or removing partners should be done before or after the conversion process, respectively.
Procedure for Conversion of Partnership into LLP
Converting a partnership into an LLP involves several steps:
- Obtain Digital Signature Certificate (DSC) and Designated Partner Identification Number (DPIN) or Director Identification Number (DIN) for all partners.
- Submit the application for conversion through Form 17 along with necessary documents, including consent of partners, incorporation documents for LLP, NOC certificate from tax authorities, financial statements of the partnership firm, list of creditors and their consent, and any other requested documents.
- The Registrar verifies the documents and issues a certificate of registration for LLP.
- Inform the Registrar of Firms about the conversion within 15 days through prescribed forms.
Trusted by experts and businesses
Apply now with MyCAbuddy
Transfer of Licenses, Registrations, and Property
Licenses, permits, or registrations held by the partnership firm do not automatically transfer to the LLP. The LLP must take steps to transfer assets registered under the partnership to the LLP. Entrepreneurs should clarify procedural aspects with relevant authorities before beginning the conversion process.
Effect after Conversion
- The partnership firm is dissolved, and its name is removed from the register of Registrar of Firms.
- Assets, liabilities, rights, privileges, and obligations of the partnership firm transfer to the LLP.
- Existing contracts, agreements, and employment arrangements remain unaffected.
- Partners enjoy limited liability protection for transactions conducted after conversion, but remain personally liable for pre-conversion business.
Register or Convert with MyCAbuddy
To register or convert a partnership firm into an LLP, MyCAbuddy provides streamlined solutions and expert guidance. Visit our platform to initiate the process seamlessly.
Benefits with us
Work smarter, save money, and get expert guidance. We’re here to help you succeed.
- Streamlined Registration Process
- Compliance Assurance
- Cost Efficiency
- Employee Welfare
- Expert Guidance
Frequently Asked Questions (FAQs):
What are the key reasons for converting a partnership firm into an LLP?
Converting a partnership into an LLP offers benefits such as limited liability, a separate legal identity, and flexibility in management, making it an attractive choice for entrepreneurs seeking a more formalized and structured business structure.
What documents are required for the conversion process?
The conversion process requires essential documents, including the consent of partners, incorporation documents for the LLP, NOC certificate from tax authorities, financial statements of the partnership firm, a list of creditors with their consent, and any other documents requested during the application process.
How long does the conversion process typically take?
The duration of the conversion process may vary, but it generally involves obtaining DSC and DPIN/DIN, submitting the application through Form 17 with necessary documents, verification by the Registrar, and issuance of the LLP registration certificate. The entire process may take a few weeks.
What steps should be taken regarding licenses and property transfer?
Licenses, permits, or registrations held by the partnership firm do not automatically transfer to the LLP. The LLP must take proactive steps to transfer assets registered under the partnership. Entrepreneurs should communicate with relevant authorities to understand and fulfill procedural requirements for a smooth transition.
What are the implications for existing contracts and liabilities post-conversion?
After conversion, the partnership firm is dissolved, and its name is removed from the register of Registrar of Firms. Existing contracts, agreements, and employment arrangements remain unaffected. Partners enjoy limited liability protection for transactions conducted after conversion but remain personally liable for pre-conversion business activities.