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Convert Partnership Firm To LLP

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  • Overview
  • Benefits
  • Procedure
  • Documents
  • Effect
  • Fees
  • FAQs

What is Convert Partnership Firm to LLP?

The world of business is constantly changing, and many partnership companies are shifting toward limited liability partnerships as it is considered a better way to run a business. In a regular partnership, only one person is responsible for all debts and loans. In a limited liability partnership, there is no need to follow all the rules and regulations of the Indian Partnership Act of 1932. If an LLP has low income, they do not need to hire an audit and also have tax benefits. If you want to convert a partnership into an LLP company, ApkaTax is the best option for you, as we have a highly professional team of members.

 

What are the Benefits of Convert Partnership Firm to LLP?

These are the advantages of a Limited Liability Company: 

  • Different Identity: An LLP has a separate legal person from its partners, whereas a partnership does not. If things do not go properly in the company, partners can take legal action against each other. Additionally, even if partners leave, the business will continue unless everyone decides to close it. 
  • Easy Flexibility: In an LLP company, it is easy to transfer the ownership. You can also easily add a new partner as a designated partner and quickly switch the ownership of the company. 
  • Suitable for Small Businesses: If LLPs have limited capital and turnover, they don't need a separate audit person.They can own property in its name rather than the partners. 
  • No Owner/Manager Divide: In an LLP, partners own and run the company. This is unlike private limited companies, as their directors might not be the same as shareholders. Because of this setup, venture capitalists usually don't invest in LLPs.

 

What is the Procedure for Conversion of Partnership Firm to LLP?

Registering a Limited Liability Partnership (LLP) in India involves many steps. ApkaTax offers a straightforward and effortless procedure. Here's an overview of the quick and detailed process for LLP registration:

  • Obtain a Digital Signature Certificate (DSC): The first step to getting a Digital Signature Certificate. It is a necessary step for the LLP registration process.
  • Director Identification Number (DIN): You must apply for the Director Identification Number (DIN). It is a unique identification number that is required for designated partners of the LLP company.
  • Name Approval: After getting the DSC and DIN, you need to get approval of the company name from the Ministry of Corporate Affairs (MCA).
  • Incorporation of LLP: Once your company name gets approved, you must submit the necessary details, including the incorporation documents, to the Registrar of Companies (RoC) for LLP registration.
  • File Limited Liability Partnership (LLP) Agreement: Filing the LLP agreement to outline partners' duties and responsibilities is essential. 
  • Filing of Form 3: To complete the registration process, you must submit Form 3 to the ROC, along with the LLP agreement and all required documents from the partners. 

The ApkaTax provides this seamless and systematic process to ensure a hassle-free transition from a Partnership firm to an LLP, enabling a smooth and efficient registration experience. For a more comprehensive understanding of each step, you can visit our ApkaTax website page. 

 

What is Documents Required for Partnership Firm Into LLP Conversion?

A specific document is required while transferring from a partnership to a Limited Liability Partnership (LLP). Here is the list given below:

  • Proposed name of the LLP company 
  • Details of the Partnership Deed of the partnership
  • All directors Digital Signature Certificate documents
  • LLP authorised capital 
  • Information of the patners contribution in the company
  • Registered office information 
  • ID proof of the partners- Voter ID, Adhard card and other details 
  • Latest bill of the Partnership Firm- Electricity bill, water bill or any other
  • Adress proof of the registered office of the Partnership such as Lease deed/ Ownership Documents of the property
  • All partners Permanent Account Number (PAN) 
  • Partnership Audit information
  • Bank statement details 
  • Partnership Business main Objects 
  • NOC of the Landlord of the company in case the office is rented 

 

Post Incorporation

  • Certificate of Incorporation of the LLP 
  • Documents that are submitted for FilliP

This compilation of documents is essential for a smooth and efficient conversion process. Ensure all records are authentic, valid, and compliant with the terms and conditions for a seamless conversion to an LLP.

 

What is Effect of Registration on Partnership Firm to LLP Conversion?

  • Transfer of Assets and Obligations: If you register for the LLP, the partnership company will exist, and all the assets and obligations will transfer to the LLP.  
  • Compliance with the LLP Act: The partners of the former partnership, now designated as partners of the LLP, must follow the rules and regulation as per the LLP Act.   
  • Continuity of Operations: The transition allows the partnership's operations to continue without interruption under the LLP structure.
  • Separate Legal Entity: The LLP functions as a distinct legal entity, enjoying perpetual existence irrespective of partner changes.
  • Legal Actions and Proceedings: Ongoing legal actions against the partnership company may be directed toward the newly formed LLP, regardless of the nature of these actions or their outcomes.
  • Tax Benefits: The LLP qualifies for various tax benefits, including the pass-through taxation system, enhancing its financial advantages.
  • Continuation of Contracts: All ongoing contracts and arrangements involving the partnership company remain in force with the LLP as a party. 
  • Assignment and Powers: Any assignments or powers given to the partnership are now transferred to the LLP to maintain the continuity of authorities and obligations. 

 

What is the Fees to Convert Partnership Firm to LLP?

Are you looking for Convert Partnership Firm To LLP Fees then here the details for you. The Convert Partnership Firm To LLP cost start from ₹15000 to ₹50000 along with Government Fee ₹ Nil and Professional Fee ₹ Nil.

Steps

Fees

Convert Partnership Firm To LLP Fee

₹15000 To ₹50000
Govt Fees Nil
Professional Fees Nil

FAQs

One of the basic requirements for converting a partnership to an LLP is the united consent of all individual partners of the firm. Additionally, during the conversion process, it is necessary to follow all the compliance-related formalities for partners.

Partners initiating the conversion must choose at least six names in advance for the partnership. These names should be listed in order of preference. The Registrar might also request the LLP to apply for a fresh name at the time of conversion.

During conversion, the number of partners must remain unchanged. There should be no increase or decrease in the count of partners.

Partners should follow these naming rules: The name should not violate any intellectual property rules in India. It must be unique and different. The name should be clear to the public. It must comply with public and constitutional laws in India.

Partners need to discuss the amount of capital they contribute during the conversion of the partnership into an LLP.

An LLP involves partners. However, any appointed director responsible for LLP duties requires a Director Identification Number (DIN), particularly applicable to independent directors.

To become an LLP partner, individuals must meet these prerequisites: You need to be 18 years old. You must be free from disqualifications. Absence of criminal liabilities or insolvency.

The Ministry of Corporate Affairs (MCA) governs the registration of LLPs, while the Registrar of Firms overlooks the registration of partnership firms.

Yes, you can modify the Limited liability company partners count or add new partners.

These are the impacts of converting a partnership firm into an LLP: The transition allows the partnership's operations to continue without interruption under the LLP structure. Upon registration of the LLP, the partnership company ceases to exist, and its assets and obligations seamlessly transfer to the LLP. The LLP functions as a distinct legal entity, enjoying perpetual existence irrespective of partner changes. The partners of the former partnership, now designated as partners of the LLP, must adhere to the regulations outlined in the LLP Act. The LLP qualifies for various tax benefits, including the pass-through taxation system, enhancing its financial advantages. 11. What are the critical steps in converting a partnership firm into an LLP? Here are the following steps to change a partnership firm into an LLP: Get DSC and DIN: Get a Digital Signature Certificate (DSC) and Director Identification Number (DIN) from the Ministry of Corporate Affairs. Unique Identity: Submit the RUN-LLP form in MCA to apply a unique name for the new LLP company. Draft LLP Agreement: Make an agreement detailing how you will operate the LLP. All partners must sign this agreement and know all business terms and conditions. It needs to comply with the Limited Liability Act of 2008. File form for incorporation of LLP: Inform the MCA about the conversion of the partnership into LLP through the application and declaration. File Form 3: Submit Form 3 to the Registrar of Companies along with the required documents and LLP agreement to finish the registration process.

The conversion results in the dissolution of the partnership. The assets and obligations of the partnership seamlessly transfer to the LLP, with the appointed members becoming partners of the LLP.

No registered or unregistered partnership firms are eligible for conversion into LLPs.

Creating an LLP document that outlines the terms and conditions of the partnership is a crucial requirement for the conversion process.

One of the most important prerequisites is securing the consent of all partners involved in the partnership for the conversion to an LLP.

A partner is a member of an LLP, while a designated partner holds specific responsibilities under the LLP Act. Selected partners are accountable for compliance, including maintaining accounts and filing documents with the Registrar of Companies (RoC).

The conversion of fees depends on the state where the LLP is registered, the authorized capital, and the professional charges of the legal advisor in the conversion process.

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