Fill required basic details and upload documents
Payment of service and government fee for the service selected
An expert will be assigned to your service.
Be Relaxed. We’ll get it done for you & update.
Partnership firms are at a disadvantage when compared to the newly introduced Limited Liability Partnership (LLP) as they do not provide limited liability protection for the partners, separate legal entity status, ability to take on unlimited number of partners and ease of ownership transfer. The introduction of LLP’s through the Limited Liability Partnership Act, 2008 has made LLPs the premier choice for small and medium sized businesses. Inciting tremendous interest among Partners of a existing Partnership firms to convert their firms into LLP.
Shift from traditional partnerships to Limited Liability Partnerships (LLPs) has increased in recent years. The reason behind this is that LLPs offer more flexibility, unlimited partners and the like. But the real reason behind the shift is due to the fact that LLPs offer a major advantage in terms of limited liability. Small and medium-sized businesses find this type of organisation structure to suit their needs very well.
The advantages of the Limited Liability Partnership (LLP) form of business outweigh those of the traditional partnership. Limited liability, perpetual succession and unlimited partners are the key incentives for a partnership firm to convert itself into an LLP.
Step I – Name Approval and DSC
a. Name Approval
b. Digital Signature Certificates
Step II – Filing of the Forms with the RoC
a. Form 17 (Application and Statement for conversion of a firm into LLP)
The application form has to be filled in with information such as:
The following attachments are to be provided:
b. Form FiLLiP (Form for incorporation of LLP)
The application form is to be filled in with:
Attachments to be provided are:
Both the forms are to be e-signed by the proposed designated partners and certified by a Cost Accountant, a Company Secretary, or a Chartered Accountant and any of whom must be in whole-time practice. The fee to be paid will vary in relation to the amount of capital contribution.
Step III – Issue of Registration Certificate
Registrar on the approval of the application shall grant the Certificate of Registration of the LLP.
Step IV – LLP Agreement
The LLP Agreement has to be submitted in Form LLP – 3 within 30 days of incorporation of the LLP. It shall contain the following particulars:
Step V – Intimation to the Registrar of Firms
The Registrar of Firms has to be given intimation regarding the conversion into LLP and the related details of the LLP within 15 days from the date of the incorporation in Form – 14. The form has to be accompanied by:
– Copy of the LLP Incorporation Certificate.
– Copy of the incorporation documents submitted in Form FiLLiP. Once all these steps are complied with, it can be said that the conversion from a partnership to LLP is complete in all respects. Nevertheless, it is to be noted that the old licenses and permits do not transfer over to the LLP. They have to be freshly applied for post-conversion.
The method of LLP registration in India does not require much legwork when it comes to documents.
To Be Submitted By Partners
For Registered Office
The Registrar, on receiving the relevant documents, may accept or refuse to register the LLP. If all documents are found correct in accordance with the provisions of the act, the Registrar shall issue a certificate of registration. The LLP will in less than 15 days of registration inform the Registrar of firms with which it is registered in Form 14. In the event of a refusal of registration by the Registrar, an appeal can be made with the tribunal.
Effect of Registration
Every partner will be jointly and severally liable for all the liabilities and obligations of the firm which were incurred in the Partnership Firm. If any partner discharges the obligation, then he shall be indemnified by the LLP.
Conversion Notice
The LLP shall provide for a period of 12 months, which begins from a date not later than 14 days after registration: – A statement that it was converted from a firm to a LLP as from the date of registration mentioned and – Name and registration number(if any) of the firm from which it was converted in every official correspondence of the LLP. In case the LLP does not provide the conversion notice then it shall be punishable with a minimum fine of Rs 10,000 and a maximum fine of Rs 1,00,000. In case of continuing default, the minimum fine shall be Rs 50 per day, and the maximum shall be Rs 500 per day.
Licenses, approvals, permits or registrations issued in the name of the Partnership firm will not be transferred automatically to the LLP. In addition, if there were any properties registered under the Partnership firm prior to the conversion, the LLP must approach the concerned authorities and take steps as prescribed to transfer the assets to the LLP. Therefore, it is important for the Entrepreneur to keep in mind various other aspects and clarify procedural aspects with the concerned licensing or registration authorities prior to beginning the process for conversion into LLP.
The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.
The initial public offering (IPO) is the process by which a private company can go public by... Read More
02 Aug, 2021By Admin Taxupp