Transformation of General Partnership to LLP
After the implementation of the LLP Act, 2008, no partnership firm incorporated under the Partnership Act, 1932 has been transformed into a Limited Liability Partnership due to additional benefits such as minimal compliances, tax advantages, limited liability, separate legal entity, etc. It is impossible to convert unregistered partnerships into LLP.
What are the requirements for conversion?
- All the partners of the partnership firm will become the designated partners of new LLP and therefore those who do not wish to remain the LLP partner should retire.
- Designated partners that want to become LLP partners should be included after LLP has been incorporated.
- All designated partners should apply for Digital Signatures.
- Some contributions should be made by all the designated partners.
- Designated partners should be informed with their income tax returns.
- The consent of all Creditors should be provided for conversion.
What is the procedure for the conversion?
- Approval of the title of the LLP in the specified form.
- File an application for transformation of a partnership into LLP.
- File required forms of registered office and approval of each partner to become a designated partner in the new LLP with ROC.
- File LLP Agreement with Registrar of Companies within 30 days.
- Issuance of Registration Certificate by ROC.
- Provide intimation to ROC about the transition of the partnership to LLP.
The time taken for conversion shall be 15-20 days and shall also depend on the documents provided by the applicant and on the speed with which the government approves them.