Partnership firm is a great platform to showcase the Business talent. The Business become greater when partnership firm is converted into Limited Liability partnership. LLP has corporate properties of both Company as well as partnership firm.
In order to convert a partnership firm into limited liability partnership a specified procedure shall be followed by every Partnership Firm. Procedure of converting partnership firm into limited liability partnership is as follows-
Step-1- Obtaining digital signature certificate
To begin the process of conversion, the partners of LLP firm are required to obtain a digital signature certificate. It is mandatory to obtain DSC as it helps in validating the documents filed electronically.
Step-2- Acquiring the valid Director Identification number
Director Identification Number is the unique number allotted to every designated member of the LLP. It is compulsory for every director/partner to obtain a valid DIN number in order to process the conversion.
Step-3- Name Approval
Further, a name which is not identical to the name of any existing company and is not undesirable in the opinion of the central government shall be applied for approval by the proposed company. To apply for the desired name the proposed company is required to file Form 1 along with resolution of the company authenticating the conversion.
Step-4- Filing Form 17
After receiving a name approval the applicant is required to file incorporation application accompanied with LLP Form 17 (Application and Statement for the Conversion of Partnership Firm into Limited Liability Partnership (LLP).
Along with form 17 the applicant is required to file the following documents-
• A Statement of the Partners of the Firm
• Copy of address proof of registered office.
• Subscription sheet signed by the promoters
• Statement of Assets and Liabilities of the Company duly certified as true and correct
• Duly stamped LLP Agreement.
• List of all unsecured creditors along with their consent to conversion
• Approval from any other authority/ body, if required
• Clearance / No objection from Tax Authorities.
Further following forms shall also be filed along with form 17-
- Form 2- Containing incorporation documents of the LLP and the subscriber’s statement.
- Form 3-It consists of Information with regard to Limited Liability Partnership agreement and any kind of changes made in this respect.
- Form 4 and Form 9- Containing the details like notice of appointment, cessation, change in name/address, designation of a designated partner or partner and consent to become a partner / designated partner.
In order to verify the Form 17 prepared it shall be digitally signed by the Designated Partner and a Chartered Accountant (in whole-time practice) or Cost Accountant (in whole-time practice) or Company Secretary (in whole-time practice).
Step-5- Certificate of Incorporation
On the successful submission of the required documents, the registrar would issue Certificate of incorporation of LLP.
As soon as the LLP is incorporated and the Partnership Firm is converted, the Partnership Firm ceases to exist. In addition to this on conversion of Partnership into LLP, all properties, assets, interests, rights, privileges, liabilities are transferred to the LLP.
One significant thing to be kept in mind is that any kind of approvals, permits or license issued to the Partnership Firm will not be transferred automatically to the LLP. Therefore, fresh licenses or registrations will be required by the Limited liability Partnerships.