PARTNERSHIP TO LLP

In a Limited Liability Partnership (LLP), as the name suggests, the partners have limited liability towards the firm. Thus an LLP has properties of both a partnership and a company.  In a LLP, no partner can be held liable for misconduct or negligence of other partners. Also, LLPs can avail certain tax benefits and are exempt from audits below certain capital limits. 

The Partnership Firm which wants to convert itself to LLP must be registered under Indian Partnership Act, 1932. Unregistered Partnership Firm can’t be converted to LLP. LLP incorporated by conversion of Partnership Firm to LLP must have same partners as they were in the Partnership Firm. Therefore it is suggested that the Partnership Firm should retire all the Partners who do not wish to be a part of LLP and if new partners are to be added, they should be added after the incorporation of LLP. 

Minimum Requirements for conversion of a Partnership into LLP: 

• Up to date filing of Income Tax Returns
• Consent of all the unsecured creditors for the proposed conversion in LLP
• Minimum 2 Partners
• At least 1 of the designated partners shall be an Indian Resident.
• DPIN for all the Partners
• DSC for all the Partners
• There has to be some sort of contribution from each partner.

Documents Required for Conversion:

• An LLP Agreement (draft will be provided by us)
• Statement of the consent of Partners to conversion
• List of all creditors along with the consent to conversion
• Statement of assets and liabilities of the company (duly certified by a CA)
• Approval from any other body/authority as may be required.
• Approval of the governing council (in the case of professional firms)
• NOC from Income Tax authorities
• Financial statements of the Partnership firm
• Particulars of any court proceedings
• Rejection letter of ROC in case of an earlier conversion application