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One Person Company Registration

Change from Proprietorship to LLP

The main objective of the LLP Act of 2008 was to establish a simplified organizational structure that reduces liability, especially when compared to a sole proprietorship. LLP combines the benefits of both a Company and Partnership, resulting in a hybrid structure that is easy to manage. As a result, converting a sole proprietorship into an LLP is a smart business decision. LLP also provides limited liability protection, ensuring that partners are not responsible for the actions of their counterparts. This feature, combined with the fact that LLP shields owners from the LLP's debts, makes it a popular choice among family-owned, closely-held Micro and Small businesses, as well as Professionals.


Benefits of conversion from proprietorship to LLP

Separate Legal Existence

An LLP is a unique legal entity that is separate from its partners, making it distinct from a general partnership firm. As a result, an LLP can hold assets and enter into contracts using its own name, as well as bring legal action against a third party in the event of a dispute.

Limited Liability of Owners

Within an LLP, partners are only liable for the capital contribution that they have agreed upon in the LLP Agreement. Therefore, partners cannot be held responsible for any losses or debts incurred by the LLP, even during the process of dissolution. Additionally, individual partners are not held accountable for the negligent or misconduct actions of their fellow partners.

Flexibility to Operate

The management and operations of an LLP are determined by the LLP agreement, which is decided upon by the partners. This allows for a great deal of flexibility, as the partners are free to distribute duties and responsibilities as they see fit, creating their own unique management structure. This level of freedom is not typically possible in other business structures.

Lower Compliance Requirement

An LLP has significantly lower compliance requirements when compared to a Private Company. This includes fewer audit requirements, with statutory audits becoming mandatory only after the LLP reaches a certain level of turnover or contribution. Furthermore, certain provisions, such as mandatory partner meetings and decision-making through resolutions, are not required in every instance and are more relaxed in an LLP.


Documents required for conversion into LLP


PAN Card

PAN Card of all partners Foreign nationals may provide passport

Partner’s Address 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

NRI/ Foreign National

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


Convert into an LLP in 3 Easy Steps

1. Answer Quick Questions
  • It takes less than 10 minutes to fill in our questionnaire
  • 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
  • Certificate of Incorporation
  • Application for PAN and TAN
3.Your LLP is Registered
  • All it takes is 21 working days*
*Subject to Government processing time

Process to convert proprietorship to LLP

Day 1-2
  • Consultancy and assistance for conversion
  • Collection of basic information & documents
Day 3– 5
  • Application for Digital Signature Certificate (DSC)
  • Application for DIN allotment of Designated Partners
Day 6– 7
  • Checking Name availability
  • Application for Name Reservation
Day 8 – 12
  • Drafting the incorporation document
  • Filing form for converting sole proprietorship to LLP
  • Certificate of Incorporation
Day 13– 18
  • Application for PAN and TAN of LLP
  • Drafting of LLP Agreement, with conversion clause
Day 19– 21
  • Payment of Stamp Duty
  • Filing of LLP Agreement with MCA
  • Government processing time

Explore conversion of proprietorship to LLP in India

Frequently Asked Questions


Like all partnerships registration requires two or more individuals to be the designated partners, one partner being an Indian national. The registered place of business has to be in India.

The LLP Act, 2008 does not put any limitations in terms of citizenship or residency to be a Partner. Foreign Nationals, including Foreign Companies & LLPs, are allowed to incorporate LLP in India provided at least one of the Designated Partners is 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.

The process for conversion of proprietorship into LLP shall be filed with the concerned department as registrations in the name of Proprietorship Firm cannot be amended. All the registrations are taken in the name of Proprietorship, if not required for any other purpose, shall be surrendered.

YES, under LLP one can carry more than one business, provided, the businesses are related or are of the same nature. Unrelated activities such as fashion Designing and Accountancy cannot be carried under the same LLP. The business activities are mentioned in the agreement and must be approved from RoC.

Once the Limited liability partnership is incorporated, it shall comply with the annual compliance requirements. In case the capital contribution of the LLP is less than ₹25 lakhs or has a turnover of less than ₹40 lakhs, the financial statements are not required to be audited. To know more details, please read our blog post “Mandatory Compliances for a Limited Liability Partnership (LLP)

Profit making is an essential condition for an LLP; hence LLPs cannot be incorporated for undertaking non-profit activities.

All the assets and liabilities of the proprietor immediately after the conversion become the assets and liabilities of the LLP. All movable and immovable properties of the proprietor automatically vests in the LLP. No Capital Gains tax shall be charged on transfer of property from Proprietorship firm to LLP. The accumulated loss and unabsorbed depreciation of Proprietorship firm is deemed to be a loss/ depreciation of the successor LLP for the previous year in which conversion was effected. Thus, such loss can be carried for further eight years in the hands of the successor LLP.

While making an application for name reservation, the trade name of the proprietorship can be applied to procure as the name of LLP. Ministry may grant the same name considering the fact that proprietorship is converted into an LLP, except where the name of the firm is already reserved by any other company/LLP. The approval of the name application is completely at the discretion of MCA.

Yes, Foreign Direct Investment (FDI) is allowed in LLP under the automatic route in sectors allowed by the Foreign Investments Promotion Board (FIPB). However, Foreign Institutional Investors (Flls) and Foreign Venture Capital Investors (FVCIs) will not be permitted to invest in LLPs. LLPs will also not be permitted to avail External Commercial Borrowings (ECBs.)

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