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Convert partnership to LLP

LLPs have an advantage over general partnerships as they are more beneficial for the partners involved. LLPs are a separate legal entity and require mandatory registration with the central government, which is not the case with partnerships. This business structure combines the advantages of a corporate structure and the flexibility of a partnership, allowing partners to organize their internal composition and operation as a partnership. As such, converting a partnership firm into an LLP is a wise business decision as it secures the partners' rights and limits their liabilities.


Benefits of partnership to LLP conversion

Limited Liability of Owners

In an LLP, the liability of partners is limited to the capital contribution agreed upon in the LLP agreement. Even in the event of liquidation, partners cannot be held accountable for the loss or debt of the LLP. Additionally, one partner cannot be held responsible for the negligence or misconduct of another partner.

separate legal entity

Partnerships are not considered separate legal entities, and if a partner dies, retires, or leaves the firm for any other reason, the partnership ceases to exist, and a new partnership must be formed. However, this is not the case with a limited liability partnership, which is a separate legal entity.

Tax benefits

Limited Liability Partnerships (LLPs) offer benefits such as saving on Dividend Distribution Tax, Minimum Alternative Tax, and Income Tax. This is because partners in an LLP receive interest and remuneration as a salary, which is payable to directors.

Raising Capital

The LLP structure makes raising capital easier since it permits a limited partner to contribute without assuming any responsibility, unlike a general partnership where all partners share unrestricted liability.


Documents Required for the partnership to LLP conversion


PAN Card

PAN Card of all partners and the firm Foreign nationals may provide passport

ID Proof

Aadhar Card/ Voter ID/ Passport/ Driving License of all partners

Photograph

Latest Passport size photograph of all partners

Business Address Proof

Electricity Bill/ Telephone Bill of the registered office address

NOC from owner

No Objection Certificate to be obtained from the owner of registered office

Rent Agreement

Rent Agreement of the registered office should be provided, if any

RoF

Certificate In case the partnership firm is registered, RoF certificate is compulsory

Note

In case of NRI or Foreign National, documents of partner must be notarized or apostilled


Register LLP in 3 Easy Steps

1. Answer Quick Questions
  • It takes less than 10 minutes to fill in our Questionnaires
  • Provide basic details & documents required for registration
  • Make payment through secured payment gateways
2. Experts are Here to Help
  • Assigned Relationship Manager
  • Procurement of Digital Signatures (DSC)
  • Application for Name Reservation
  • Documents drafting including LLP Agreement
  • Application of conversion into LLP
  • Certificate of Incorporation
3. Your LLP is Registered
  • All it takes is 18-20 working days*
*Subject to Government processing time

Process for Partnership to LLP Conversion

Day 1-2
  • Application for Digital Signature Certificate
  • Application for DIN allotment of Designated Partners
Day 3– 6
  • Checking Name availability
  • Application for Name Reservation
  • Reservation of LLP Name
Day 7– 14
  • Drafting documents for incorporation
  • Filing application for conversion into LLP
  • Certificate of Incorporation
Day 15 – 20
  • Application for PAN and TAN of LLP
  • Drafting of LLP Agreement
Day 20 – 25
  • Stamp Duty Payment
  • Filing LLP Agreement
  • Government processing time

Explore partnership to LLP conversion

Frequently Asked Questions


The partnership is required to consist of the same partners that were present in the original Partnership and in the same proportion in which their capital accounts stood in the books of the Firm on the date of conversion. Therefore, the LLP cannot have more or less partners than the extant Partnership Firm, and any changes in the number of partners can be made only after conversion into the LLP.

LLP name is reserved through an online form. In accordance with the prescribed regulations, the partners can provide a maximum of 6 names in preferential order to reserve any one. The Registrar may ask to re-submit the application with a different name if given names do not fall under criteria of uniqueness, relevancy or do not fulfill the other requirements.

No. There is no minimum amount prescribed to form an LLP. It can start off with any amount of capital demanded by the business. Although there is no minimum requirement, every partner must make a contribution to LLP. The amount of capital contribution is disclosed in the LLP Agreement and amount of stamp duty to be paid is decided by total contribution amount.

Director Identification Number is a unique number assigned by the Ministry of Corporate Affairs to Individuals on application made which allows any individual to be a Director in any Company or Designated Partner in LLP. Further, the concept of DPIN (Designated Partner Identification Number) does not persist anymore with respect to incorporation of LLP.

There are no limitations in terms of citizenship or residency to be a Partner. Therefore, the LLP Act, 2008 allows Foreign Nationals, including Foreign Companies & LLPs to incorporate LLP in India; provided at least one Designated Partner is a resident of India. However, the person should be of age 18 years or above i.e. not a minor and competent to enter into a contract. Also, the proposed Designated Partner shall have DIN.

LLP Agreement is an agreement executed by all the designated partners and partners after LLP incorporation. The agreement prescribes all the clauses related to business; including the rights, role, duties and responsibilities of partners. The agreement must be filed within 30 days of the issue of a certificate of incorporation. Failure to which will charge an additional fee of ₹ 100 per day till the date of filing.

To effect any changes in the Limited Liability Partnership, the Partners shall pass the resolution at the meeting of Partners as required by the LLP Agreement of concerned Limited Liability Partnership. Further, the resolution shall authorize any of the existing Designated Partner to act on behalf of the LLP and its Partners. Also, the authorized partners shall also hold a valid DSC to file the application to Registrar. As soon as the partners execute the Supplement Agreement for a change of partner or their respective designation, an application shall be filed with MCA to approve the changes of a partner or the designation.

LLP and general partnership are treated equivalently (except for recovery purpose) in the Act; the conversion from a general partnership firm to LLP will have no tax implication. This is true if the rights and obligation of the partners remain the same after conversion and if there is no transfer of any asset or liability after the conversion. If there is a violation of these conditions, the provision of capital gain will apply.

Generally, the basic purpose of conversion is for keeping the same name to maintain the brand identity in the market. To convert the LLP under the original name it is essential to attach any valid proof that corroborates the claim of use of the brand name by the firm.in such cases, MCA grants the approval on the basis of documents attached in the concerned form for name reservation.

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