As an entrepreneur, India offers you many options to select a business. You can choose among various forms of businesses but before choosing the form of business, you must know the requirements, advantages & disadvantages of all these forms of business. You need to check that which form of business benefits you the most. If we talk about partnership, one of the biggest disadvantages of this form of business is unlimited liability. It means personal assets of the partners are at high risk but many forms of business provide you the advantage of limited liability too. For ex – LLP & Private limited company.
Entrepreneurs now days’ converting the partnership firms to LLP’s to prevent risk of unlimited liability. There are many reasons for converting partnership firm into an LLP and they are as follows –
- Separate legal entity
- Unlimited number of partners
- Limited liability
- Ease of ownership transfer
LLP is very popular among small & medium sized businesses. Any partnership firm want to convert into LLP must be registered under India partnership act, 1932. Partnership firms who are not registered under Indian partnership act 1932 cannot convert partnership firm into LLP.
What Is Included In Our Package?
Minimum Requirements To Convert Partnership Firm Into LLP
- Minimum 2 partners
- DPIN for all partners
- DSC for all partners
- One designated partner should be an Indian citizen
- Consent from all unsecured creditors for conversion in LLP
- The partners shall receive consideration only by way of allotment of shares in LLP.
- There should be some sort of contribution from every partner
- Up to date submission of income tax returns.
Advantages of Converting Partnership Firm Into LLP
Procedure of Converting Partnership Firm Into LLP
The procedure of converting partnership firm into LLP is as follows –
- Copy of acknowledgement of latest income tax return
- Statement of assets & liabilities of the firm certified by any chartered accountant of India.
- Statement of consent of partners of the firm
- List of approval of all the secured creditors for converting a partnership firm into LLP.
- No objection certificate from tax authorities.
- Approval from any regulatory body/authority.
- Proof of registered office of LLP
- Approval of regulatory authority (If required)
- Subscriber’s sheet including consent
- Details of LLP/company in which person is a director or a partner.
LLP form 3 includes LLP agreement. LLP agreement should be attached with form-3 and this form is filed once the partnership firm is converted into LLP.