Process for conversion of Partnership Firm into LLP

Procedure to Make Changes in LLP Agreement

The shift from conventional partnerships to Limited Liability Partnerships (LLPs) has extended in the latest years. The purpose at the back of that is that LLPs provide extra flexibility, limitless companions, and the like. But the actual riding pressure at the back of the shift is because of the reality that LLPs provide a prime gain in phrases of confined liability. The pressure on the private property of the associate is positioned to relaxation with regards to LLPs on account that they’re a hybrid of each a partnership and a non-public confined company. Small and medium-sized groups locate this sort of corporation shape to healthy their desires very well.

The benefits of the Limited Liability Partnership (LLP) shape of commercial enterprise outweigh the ones of the conventional partnership. Limited liability, perpetual succession, and limitless companions are the important thing incentives for a partnership corporation to transform itself into an LLP.

Why LLP Over a Partnership Firm?

Apart from the important thing differences, there are some capabilities that make the LLP a greater perfect choice over a general partnership firm:-

Freedom of Management/Flexibility: The companions are given an inexpensive stage of pliability in undertaking the operations and going for walks in the everyday affairs of the LLP. The LLP Agreement isn’t always broadly speaking inspired by the aid of using the Limited Liability Partnership Act, 2008, this means that to mention that the Act is relatively bendy on how the settlement may be drawn up.

Perpetual Succession: Unlike withinside the conventional partnership, the loss of life of the accomplice does now no longer have an effect on the lifestyles of the LLP. The separate criminal entity function of the LLP lets in it to hold on the business.

Investment Attraction: Foreign traders and project capital price range examine LLPs as a funding possibility because it has a company shape and is greater organized as antagonistic to standard partnerships.

Multidisciplinary LLPs: Professionals of diverse disciplines can paint collectively in an LLP, that’s a specific function and a bonus in itself.

How to Change a Company From a Partnership to an LLP

Step I – Name Approval and DSC

  1. Name Approval
  • Register and sooner or later go online to the MCA portal.
  • Under the MCA Services tab, the “RUN – LLP” alternative is to be selected.
  • RUN stands for Reserve Unique Name.
  • In the dropdown list, the alternativeconversion of partnership firm into LLP” is to be selected.
  • Subsequently, there are Proposed Names for the LLP to receive.
  • Further, any assisting files can be uploaded withinside the PDF format, and then the “Submit” button is to be clicked on.
  • The web page is redirected to a price gateway wherein the costs amounting to Rs. two hundred is to be paid for the shape.
  • The reserved call then holds a validity length of ninety days.

     2. Digital Signature Certificates

  • In order to continue beyond the Name Incorporation stage, it’s miles obligatory that the Designated Partners of the LLP own their very personal Digital Signature Certificates.
  • Every e-shape calls for the DSCs of the Designated Partners to be affixed to the applicable bureaucracy with a view to making sure a successful submission.

Step II – Filing of the Forms with the RoC

  1. Form 17 (Application and Statement for conversion of a corporation into LLP)

The software shape must be stuffed in with facts such as:

  • Service Request Number (SRN) of the RUN – LLP shape.
  • Name of the Proposed LLP.
  • Name, cope with, registration, and partnership settlement info of the corporation.
  • Details concerning the range of companions, and capital contribution to be supplied.
  • Secured lender’s info.

The following attachments are to be supplied:

  • Statement of Consent of Partners of the corporation.
  • Statement of belongings and liabilities of the corporation licensed through a Chartered Accountant in practice.
  • Copy of the trendy Income Tax Return acknowledgment.
  • List of all of the secured lenders together with their consent.
  • Any different assisting facts (optional).

Form FiLLiP, b. (Form for incorporation of LLP)

The software shape is to be stuffed in with:

Details of the RUN – LLP if you want to be auto-filed.

Registered workplace cope with and e-mail identity notification of the LLP.

Office of the Registrar.

Nature of enterprise activities.

Details of the companions, targeted companions, their DINs, DPINs and PANs.

Amount of contribution through the companions withinside the LLP.

Attachments to be supplied are

  • Proof of coping with the registered workplace of the LLP.
  • Subscriber’s consent.
  • NOC from the property’s proprietor and a duplicate of application bills (now no longer greater than 2 months antique).
  • Approval of any regulatory authority, wherein necessary.
  • Details of any LLP/Company wherein a chosen associate is likewise a director/associate.
  • Proof of identification and coping with the applicants.
  • Where the call of the LLP is the same as any current Company/LLP, a duplicate of the Board Resolution or Consent of the prevailing LLP serving as a No Objection Certificate.

Both the bureaucracy are to be e-signed through the proposed targeted companions and authorized through a Cost Accountant, a Company Secretary, or a Chartered Accountant or any of whom should be in whole-time practice. The charge to be paid will range when it comes to the quantity of capital contribution.

Step III – Issue of Registration Certificate

The Certificate of Registration of the LLP will be granted through the Registrar on approval of the software.

Step IV – LLP Agreement

The LLP Agreement must be submitted in Form LLP – three within 30 days of incorporation of the LLP. It shall incorporate the subsequent particulars:

Name of the LLP

Name of the targeted companions and different companions

Form of capital contribution and income sharing ratios

Rules governing the LLP

Rights and obligations of the companions

Step V – Intimation to the Registrar of Firms

The Registrar of Firms has to receive intimation concerning the conversion into an LLP and the associated info of the LLP within 15 days from the date of the incorporation in Form – 14. The shape must be followed through:

– Copy of the LLP Incorporation Certificate.

– Copy of the incorporation files submitted in Form FiLLiP. Once a majority of these steps are complied with, it could be stated that the conversion from a partnership to LLP is whole in all respects. Nevertheless, it’s miles to be stated that the antique licenses and lets in do now no longer switch over to the LLP. They need to be freshly carried out for post-conversion

Leave a Reply

Your email address will not be published.