A firm where two or more people share ownership of the business is a partnership firm. In a partnership firm, each partner contributes to all aspects of the business. The partners also share the profits and losses of the business. An LLP, a Limited Liability Partnership, on the other hand, is a business arrangement where all partners have limited liabilities. One partner is not responsible for the other partner’s diligence or negligence.

Therefore, for those who want to be on the safe side when doing business, it’s a good idea to convert your Partnership into a Limited Liability Partnership. By doing so, you’re going to combine the partnership aspect of a firm with the Limited Liability aspect of a company.

Advantages of converting to an LLP

1. Limited liability protection is the main advantage for which partners seek conversion from Partnership to LLP.
2. It is an interesting choice for small and medium-sized businesses as it is a great way to bring business synergies together.
3. It forms a simple working condition limiting liability to partners.
4. The existence and running of an LLP do not solely depend on either of the partners. For example, the demise of a partner in a Partnership firm may cause the company to disintegrate. In LLP, it may not cease to exist in such a case. The partners of an LLP may keep changing from time to time, and it will not affect the LLP’s continuity.
5. The liability of partners in LLP is limited to the amount of capital invested. There is no minimum limit to the amount of capital to be invested.
6. In a partnership firm, the minimum number of partners is two, and the maximum is limited to ten. However, in LLP, there is no upper limit to the number of partners.
7. LLPs can be merged with other LLPs, unlike Partnerships.

 Eligibility Criteria to Convert Partnership into an LLP in India

Can a Partnership be converted into LLP? Yes, you can. But before you’re allowed to convert a partnership into an LLP, you must fit the following criteria

1. All the partners should consent to the decision to convert their Partnership to LLP.
2. You must clear all the liabilities that you have as a partnership firm.
3. If you’ve acquired any type of business certification under the name of the partnership firm, you need to acquire consent from the certifying authority as well.
4. Consent from the suppliers of the partnership firm is also required.

 Documents required for converting a partnership firm into an LLP in India

Draft documents for conversion of Firm into an LLP

1. Designated Partner Identification Number (DPIN): Filing an application under DPIN must be obtained for all partners 
2. Digital Signature Certificate (DSC): This is necessary to apply for digital authentication of the company
3. Form LLP-1: This E-form must be filled to add “LLP” to the existing firm name. The registrar will accordingly verify any resemblance to the existing firm names or trademarks registered or pending registration.
4. Draft of LLP agreement
5. Form-17 with Registrar of Companies (ROC): This is an application of conversion that must be filled with the following attachments
6. Statement of the consent of Partners for conversion
7. List of all creditors along with their consent to conversion
8. Statement of assets and liabilities of the company duly certified by a CA
9. Approval from any other body/authority may be required. Approval of the governing council for professional firms
10. NoC from Income Tax authorities
11. Financial statements of the Partnership Company
12. Particulars of any court proceedings
13. Rejection letter of ROC in case of any earlier conversion application

Process for converting a Partnership firm into an LLP in India

Can a Partnership be converted into LLP? Yes. And the process to convert a partnership firm into a Limited Liability partnership is as follows:

Step 1: Name Approval

First, you must get approval to use the name of the partnership firm for the LLP.

Step 2: Obtain DSCs

After acquiring the approval, you must gain the digital signatures of the designated partners.

Step 3: Apply for Conversion

You must draft a FORM-17 with the Registrar of Companies. It’s called the application of conversion.

Step 4: Get consent

Obtain consent from the partners, suppliers, investors, and from those to whom you once owed any type of debt.

Step 5: List assets

Create a statement of all the assets and liabilities.

Step 6: Apply for Incorporation

Fill out the form for incorporation of LLP online.

Step 7: Certificate grant

Obtain the Certificate of Incorporation of the LLP.

Step 8: LLP Agreement

Draft an LLP agreement using the points mentioned in the partnership deed.

Step 9: RoF intimation

Within 15 days of conversion of Partnership to an LLP, intimate the Registrar of Firms about the conversion.

Our Assistance in converting your Partnership into LLP in India

We at BRITSI, provide end-to-end solutions for the conversion of a Partnership to an LLP. Our services include:

1. DIN, DSC & Name Approval
2. Submission of Form
3. Reviewing the application and making changes if needed
4. Obtaining the Certificate of Incorporation
5. Drafting the LLP agreement

BRITSI is a leading legal consultancy firm providing comprehensive services relating to a partnership firm to LLP conversion. We do the legwork necessary to give the Limited liability factor to your standard partnership firm. So, take your first steps towards this conversion and reach out to us.