Partnership firm has multiple shortcomings which are removed by conversion to Limited Liability Partnership (LLP).
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. In this article we look at the process for conversion of partnership into LLP.
LLPs are governed by the LLP Act, 2008 and the process for conversion of partnership into LLP is covered under Second Schedule of the LLP Act. Reasons for conversion of partnership firm into LLP can be found in another article titled “Reasons for converting your Existing Partnership Firm into a Limited Liability Partnership”.
One of the major requirements for the conversion of Partnership into LLP is that the LLP formed from the Partnership have the same Partners as the original Partnership. The LLP formed cannot have new or less Partners than the Partnership firm. Therefore, if any Partners are to be added to the LLP, the Partnership should first be converted into a LLP and then Partners must be added to the newly formed LLP. On the other hand, if Partners are to be removed, it is best to remove them prior to starting the process for conversion of Partnership into LLP.
1. Freedom of Management/Flexibility: The partners are given a reasonable level of flexibility in conducting the operations and running the day to day affairs of the LLP. The LLP Agreement is not mostly influenced by the Limited Liability Partnership Act, 2008, which means to say that the Act is comparatively flexible on how the agreement can be drawn up.
2. Perpetual Succession: Unlike in the traditional partnership, the death of the partner does not affect the existence of the LLP. The separate legal entity feature of the LLP allows it to carry on business.
3. Investment Attraction: Foreign investors and venture capital funds look at LLPs as an investment opportunity as it has a corporate structure and is more organised as opposed to traditional partnerships
4. Multi disciplinary LLPs: Professionals of various disciplines can work together in an LLP, which is an exclusive feature and an advantage in itself.
1. Proof of address of the registered office of the LLP.
2. Subscriber’s consent.
3. NOC from the property’s owner and copy of utility bills (not more than 2 months old).
4. Approval of any regulatory authority, where necessary.
5. Details of any LLP/Company where a designated partner is also a director/partner.
6. Proof of identity and address of the applicants.
7. Where the name of the LLP is identical to any existing Company/LLP, a copy of the Board Resolution or Consent of the existing LLP serving as a No Objection Certificate.
Share your contact details and get free consultancy.
Make Online/Offline payment of your selected service
Submit required documents for further process
After completion of work all documents will be deliverd.