Limited Liability Partnerships have more priority over the general partnership structure as it is much more beneficial for the partners. It is a business structure that integrates the advantages of the company’s corporate structure and the flexibility of the partnership. The conversion of a partnership firm to LLP shall be as per Section 55 of the Limited Liability Partnership Act 2008 read with Schedule II of the Act.
LLP is a separate legal entity with compulsory registration with the central government. However, it is not the case with the partnership firm. LLP offers a host of features mentioned below making it more attractive than a partnership firm:
Step by step guide for conversion of Partnership Firm into LLP:
Generally partners in a Partnership Firm would not have a digital signature as the same is not necessary for the registration of a partnership firm.
A DIN is a unique number for each person who is an LLP Partner or Director.
Before applying for reservation of name, applicant must check the rules for selection of LLP name.
The documents required for LLP registration and for Form FiLLiP.
Further when the LLP is incorporated and the Partnership Firm is converted the Partnership Firm would be deemed to be dissolved.
Following documents are necessary to convert a partnership into an LLP:
– Address proof of the office
– Regulatory authority’s approval
– Details of all the partners and directors
– Consent of all the partners and directors
– Latest income tax return filing
– NOC from tax authorities
– Creditors and their consent
– Certified liabilities and assets of the partnership
Every LLP would be required to file an Annual Return with ROC. LLP shall duly file Annual Return in e- Form-11, with the Registrar. Along with the prescribed fee, within a period of 60 days from the end of every financial year.
Both designated partners and partners are categorized differently in LLP. Additionally, the designated partners are more liable than the partners. Further, they are accountable for the day to day business activities as well as for all regulatory and legal compliances.