Procedure for the Conversion Of Partnership Firm into LLP

Introduction

The basic difference between regular partnership firm and Limited Liability Partnership is the extent of liability of each partner. In regular partnership firm the liability of each partner is unlimited which means that every partner is liable for the act done by other partners. Whereas in Limited liability partnership the liability of each partner is limited up to the extent of capital contribution introduced by each partner.  The process of partnership firm registration in gujarat is somewhere difference than the registration of Limited liability partnership (LLP). One can also convert their regular partnership firm into LLP by following few steps as mentioned below.

Process to Conversion Partnership Firm to LLP

1) Getting the DPIN (Designated partner identification number): The process to convert partnership firm requires few mandatory steps to be taken which starts from getting DPIN (Designated Partner Identification number. Those partners who are supposed to be designated partner in the LLP are required to avail DPIN. This is unique identification number allotted to designated partners which can be used throughout all the compliances to be carried in the name of LLP. The DPIN is also known as DIN (Director Identification number). In the case of a company, the same number is referred as DIN.

2) Name Approval: After the DPIN availability process is over, person can apply for the Name reservation of the proposed LLP through Ministry of Corporate Affairs. The reservation of the name of the LLP must be obtained prior to filling out the forms to convert from the Partnership Firm into LLP. The proposed name must be unique and must be in accordance with names availability rules as prescribed by MCA. As and when we will file Form-17 (for conversion) SRN will be required of the Name Reservation (RUN) of LLP. After the name got approved, the next process of conversion of partnership into LLP requires filing of form FILLIP.

3) Filing of form FILLIP: The full form of FILLIP is Form for Incorporation of Limited Liability Partnership. There must be minimum 2 designated partners require to file the incorporation form FILLIP. The regular partners in the limited liability Partnership shall be termed as regular partners. The basic difference between designated partner and regular partners is that the DPs are responsible to carry all the compliance as made mandatory by MCA whereas the regular partners are not imposed with such responsibilities. Before filing of form FILLIP make sure to gather required documents and necessary information as mentioned below. These documents generally include identification proofs and residential proofs of partners and proof of registered office of proposed LLP.

Documents and information required for Form- Fillip

i) Name of Proposed LLP

ii) DSC of Designated Partners

ii) Capital of Proposed LLP and Contribution of Proposed Partners

iv) Phone No. and E-Mail Id of Proposed Partners

v) Voter ID Card/Driving Licence/Passport of Proposed Partners

vi) Latest Utility Bill (Not Older Than 2 Months)(for Registered Office)

vii) Registered Office Document (Index-2/Allotment Letter/ Possession Certificate/ Sale Contract)

viii) PAN of all Designated Partners/ partners

ix) Bank Statement of Designated Partners/ partners

One must fill every detail in Form FILLIP in order to get it approved and also attach required documents as asked in the said form. Such attachment includes the consent letter from designated partners as to giving their consent to be appointed as designated partner in proposed LLP, Proof of registered office of LLP, Identification proofs and residential proofs of partners.

4) Filing of Form -3: On getting approval of form FILLIP and getting certificate of incorporation of LLP, one must proceed to file Form 3. This form is for the purpose of filing the LLP agreement or we can sale LLP deed to the MCA. The LLP is the form of partnership firm with limited liability and governed by statutory act called Limited Liability Partnership act-2008. Hence the execution of LLP agreement/LLP deed is must. This deed or agreement shall include the main object of LLP, The details of each designated partner and regular partners, the profit and loss sharing ratio of partners, capital contribution by partners, registered office of llp and other terms and conditions which each partner is required to follow and act accordingly. Any changes in the said deed/agreement must be with mutual consent of all the partners and must be signed by all the partners. One must file this form to the Ministry of corporate affairs on getting certificate of incorporation of LLP.

5) Filling of Form-17: This form is called Application and a Statement of the Conversion of Partnership Firm into LLP (Limited Liability Partnership) i.e., Form 17. This form includes a Declaration by a Partner of the Partnership firm and shall be Digitally Signed by a designated partner. This form must be certified by a Company secretary in whole time practice/Chartered accountant in whole time practice/ Cost accountant in whole time practice. This form asks to provide basic information of partnership firm to be converted into the LLP. Such information includes name of existing partnership firm, names of all partners, contribution of all partners, and date of registration of partnership firm and so on. One must submit few documents as mentioned below while filing this form to MCA.

Attachments in Form-17:

Declaration of the consent of the partners of the company.

Statement of the assets and liabilities of the company duly verified as accurate and true from an official Chartered Accountant in practice.

Copy of acknowledgement of most recent revenue tax form.

A list of all secured creditors together with their agreement to the conversion

Conclusion:

The procedure to convert the partnership firm into LLP requires professional knowledge and utmost care while filing the forms. Thus it becomes obvious to consult the best professional in the field. Online chartered provides the accurate and perfect professionals to carry out such conversions from beginning to end.