Conversion of Partnership Firm into Limited Liability Partnership (LLP) By CS Kamal Soni


⇒ Conditions for conversion of a firm into LLP:

  • DSC of Partners

  • DPIN number of partners

  • Name Approval from ROC

  • LLP Form 17 with LLP form Fillip

  • LLP form 3

⇒ Further note:

  1. All the partners of the existing firm should compulsorily become the partners of LLP.

  2. Minimum 2 partners as Designated Partners and one of them should be Resident in India.

  3. Digital Signature Certificate for the Designated Partners.

  4. LLP (Limited Liability Partnership) Name.

  5. LLP (Limited Liability Partnership) Agreement.

  6. Registered Office for the existing partnership firm.

⇒ Filing LLP Form 17:

Application and a Statement of the Conversion of Partnership Firm into LLP (Limited Liability Partnership) i.e., Form 17  should be filed along with the incorporation application. The subscriber’s sheet should also be filed while converting a partnership firm into an LLP. After filling the form 17 the mentioned documents should be mandatorily attached with it:

  • Statement of consent of partners of the firm;

  • Statement of assets and liabilities of the firm duly certified as true and correct by the Chartered Accountant in practice;

  • Copy of acknowledgment of latest income tax return (Mandatory);

  • Approval from any regulatory body/ authority (Mandatory, in case applicable approvals from the concerned body/ authority or authorities is required and have been obtained);

  • List of all the secured creditors along with their consent to the conversion (Mandatory in case consent of all the secured creditors for conversion of the firm into limited liability partnership has been);

  • Clearance or No Objection Certificate from Tax Authorities;

Prepare a list of all the secured creditors along with their consent to the conversion. It is Mandatory in case the consent of all the secured creditors for the conversion of the firm into a limited liability partnership has been.

A Clearance or No Objection Certificate (NOC) from the Tax Authorities.

Once, an LLP Form 17 is filled it must be digitally signed by a Designated Partner from a professionally practicing Chartered Accountant/Cost Accountant/Company Secretary.

⇒ LLP form Fillip (Incorporation):

For the Conversion of a Partnership Firm into LLP, LLP Form 2 and LLP Form 3 must also be filed. LLP Form 2 contains the incorporation document and the subscriber’s statement along with the following attached documents:

  1. Proof of address of registered office of LLP;

  2. Subscribers’ sheet including consent;

  3. In principle approval of regulatory authority, if required

  4. Detail of LLP(s) and/ or company(s) in which partner/ designated partner is a director/ partner (if any).

The Details of LLP(s) and/ or company(s) in which the partner/ designated partner is a director/ partner (if any).

⇒ LLP form 3 (Agreement):

LLP Form 3 contains the initial Limited Liability Partnership Agreement. This form can be filed once the Partnership Firm is converted into an LLP or while filing for the conversion of the Partnership Firm into LLP. The LLP Agreement must be attached with the  LLP Form 3.
 
On successful conversion of Partnership firm into LLP, the Registrar would issue Certificate of Incorporation of LLP. Once, the LLP is incorporated and the Partnership Firm is converted, the Partnership Firm would be deemed to be dissolved. Further, on conversion of Partnership into LLP, all properties, assets, interests, rights, privileges, liabilities, obligations of the firm are transferred to the LLP. In other words, the whole of the undertaking of the firm is transferred to the LLP.

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