Convert the Partnership Firm into LLP Company

The transition from traditional partnerships to Limited Liability Partnerships (LLPs) has accelerated in recent years. This shift is primarily driven by the significant advantage of limited liability, which protects the personal assets of partners. LLPs also offer greater flexibility, an unlimited number of partners, and a structure that blends elements of both partnerships and private limited companies. These features make LLPs particularly attractive to small and medium-sized businesses. 

Compared to traditional partnerships, LLPs provide several key benefits, including limited liability, perpetual succession, and no cap on the number of partners. These advantages make LLPs a preferred choice for partnership firms looking to enhance their operational efficiency and legal security.

Major difference between LLP and Partnership

Advantages of LLP incorporation:

1. Transparency in Operations
2. Perpetual Succession
3. Separate Legal Entity
4. Limited Liability
5. Investment attraction
6. Freedom of Management/Flexibility

Pre-requisite for conversion

1. A partnership firm should be a registered firm
2. Name should be reserved for LLP
3. Consent from existing partners and stakeholders of the Partnership must be obtained
4. A Digital Signature must be obtained
5. Partners should not be disqualified
6. Existing partners should obtain the DPIN (Designated Partners Identification Number)
7. At the end of the conversion, the exiting partners should be the same post conversion

Steps for Converting a Partnership into an LLP:

STEP 1: Name Approval and DSC

• Name Approval

• File RUN for name reservation on the MCA portal
• Select conversion of the firm into an LLP while reserving the name
• May file two proposed names at a time
• Reserved name will be valid for 90 days; file the incorporation form within these days
• Get the DSC Certification for all the partners and designated partners

STEP-2 Filing Forms with ROC

• File Form -17

• File the Form-17 along with the SRN details of the Name filing
• Address details of the proposed LLP
• Details regarding the partner’s contribution
• Secured creditors detail
• Consent statement of Partners
• Copy of Income tax filed
• List and consent of secured creditors

• Filing of Fillip

• File the Fillip application for the incorporation of the proposed LLP

STEP -3 Agreement of LLP

• Filing of LLP form -3

• Post incorporation file Form- 3 within 30days from the date of incorporation for submitting the LLP agreement.

STEP -4 Intimation to ROC

• Filing of Form -14

• This form is for intimation to the Registrar about the conversion of a firm into an LLP
• This should be filed within 15 days of the date of incorporation.

Effect of Conversion

• LLP will come into existence, and the partnership will stand dissolved post conversion
• All assets and liabilities, rights and privileges which are vested with the firm will vest in the newly formed LLP
• Proceedings that were pending against the firm will now be done under the LLP name
• Existing contracts and agreements will be renewed in the name of the LLP
• Post conversion intimate to the statutory bodies regarding the conversion and get the approvals and amendments in the LLP name.
• Now the liabilities of partners will be limited post conversion into LLP.