Procedure for Conversion of Partnership to Limited Liability Partnership
After implementation of Limited Liability Partnership (LLP), more and more Partnership Firms are converting themselves to Limited Liability Partnership (LLP) for obvious reasons of unlimited number of Partners, perpetual succession, limited liability, transferability etc. In this article we will discuss about the step by step procedure to convert a Partnership Firm into a Limited Liability Partnership (LLP).
Buy a Digital Signature Certificate
First requirement after the Partners of a Partnership Firm decides to convert their Partnership Firm into Limited Liability Partnership is to get a Digital Signature Certificate (DSC). Class 2 Digital Signature Certificate (DSC) is required for this purpose. Click here to know more about Digital Signature Certificate. Click here to buy Digital Signature Certificate (DSC) online through MyEfilings.com
Get Directors Identification Number (DIN)
DIN is a unique number issued by the Ministry of Corporate Affairs (MCA). Directors and Designated Partners of all the Private Limited Companies or LLPs have to register themselves with the MCA by providing some documents. On receipt of the documents, MCA allots a unique number which is called DIN.
MCA used to issue Designated Partnership Identification Number (DPIN) for the Designated Partners of Limited Liability Partnership. To avoid duplicity and to give ease to stakeholders, MCA vide its circular dated 8th July, 2011 has integrated DIN and DPIN. Therefore to become Designated Partner of a Limited Liability Partnership, one has to obtain DIN only.
Name Application and Approval
On obtaining DIN from the Ministry of Corporate Affairs, the first step is to apply for desired name. Name approval by MCA is necessary before filing any document regarding conversion of Partnership Firm to LLP. Click here to know more about how to name a Company.
Filing of forms required for conversion of Partnership Firm to LLP (LLP Form 17 etc.)
When name has been made available by the Ministry of Corporate Affairs (MCA), LLP Form 17 (Application and statement for conversion of firm into Limited Liability Partnership (LLP)) along with other required forms like has to be filed with the ROC. Other forms are as given below,
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Form 2 (Incorporation document and subscriber’s statement),
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Form 3 (Information with regard to Limited Liability Partnership agreement and changes, if any, made therein)
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Form 4 and Form 9 (Notice of appointment, cessation, change in name / address / designation of a designated partner or partner and consent to become a partner / designated partner)
Along with the above mentioned forms, following documents must be attached:
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Statement of Partners;
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Subscription sheet signed by the promoters;
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Statement of Assets and Liabilities of the Company duly certified as true and correct by a Chartered Accountant;
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Duly stamped LLP Agreement;
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Proof of Address of Registered Office;
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List of all unsecured creditors along with their consent to conversion;
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Approval from any other authority / body, if required;
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Clearance / No objection from Tax Authorities.
On submission of all the above documents and forms with the Registrar of Companies, and upon solving all the queries raised by the Registrar of Companies, Certificate of Incorporation of LLP is issued. Partnership is converted into LLP, on the date of issue of Certificate of Incorporation. All the Assets, Liabilities, interests, rights etc are transferred to LLP.
Things to remember before conversion of Partnership Firm to LLP
The licenses, approvals or permits issued to Partnership Firm under any law do not get transferred to LLP automatically. LLP has to reapply for all those licenses. The promoters should consider this aspect before arriving at decision to convert Partnership Firm to LLP.