Partnership to LLP

Are you looking  for conversion from Partnership to LLP for multiplied success or growth?

Or do you wish to take your company to the next level?

If so, this conversion can be a real game-changer, which can propel your business towards enhanced growth or success. As an added advantage, converting to LLP is a highlighting factor in protecting your assets. Unlike a partnership, your purchases can be put at risk. Still, while transitioning to LLP, you can be offered limited liability, which safeguards you against any financial threats/ obligations or lawsuits.

Additionally, an LLP gives you a goldmine of growth opportunities. With this structure, the talent, capital, and new partners can be acknowledged. By bringing new partners, your business would get the resources it needs, along with the expertise in encouraging the expansion plans.

Likewise, an LLP advertises the need for a structure that enhances the brand image. No wonder let us learn to maximize the company’s growth while protecting your assets and elevating your brand identity.

Can a Partnership be Converted into an LLP?

"Partnership" refers to business structures that apply to small or medium-sized businesses co-owned or operated by two or more individuals. In some cases, even the company owners aim for conversion of partnership into LLP (a limited liability company). Let's take a closer look at what it is and how it works,

Before considering the conversion process, you must understand the basics of LLPs and partnerships. A partnership is a style of business structure where two or more people come together to establish a business venture. In collaboration, the partners share the losses, profits and business liabilities.

Whereas LLP is considered to be a hybrid business structure, which becomes a combination of the corporation and the partnership. Within this, the partners with limited liability have their assets protected from any business debts or legal actions involved. Furthermore, LLPs comparatively offer flexibility, enabling the partners to participate in the business. Therefore, such is how a partnership can be converted into an LLP.

The benefits of  conversion of  Partnership into LLP are as follows-

• Reduced Risk

A limited liability partnership operates similarly to a company, mainly because it offers limited liability to its partners. If the firm incurs debt, the partners will not be held personally responsible, although they are still obligated to fulfill their financial responsibilities within the partnership.

• Perpetual Succession

The perpetual succession is devoid of any separate entity, which solely depends on the will and survival of partners ( except in the case of the partnership restricted by time. Such a thing ensures that the business remains ongoing and can function smoothly, regardless of any incorporated changes. 

It assures and carries out the uninterrupted existence of the company in the light of recurring changes, either in management or ownership. 

• No capital gains

It is usually acknowledged that when a partnership firm transitions into a limited liability partnership, it does not have capital gains taxation, especially in the cases of this conversion.

The key difference between Partnership and LLP is mentioned below-

The documents required to transition from Partnership to LLP are as follows-

• Name of the Proposed LLP
• Information related to the Partnership Deed of the partnership firm
• Digital Signature Certificate of the Respective Partners
• Authorised Capital of the LLP
• Registered office information of the partnership limited entity
• Any information related to the contribution by the partners
• Identification Documents of the Partnership- Voter ID and other related information
• Whether it be an electricity bill, water bill, or any other bill for the partnership firm
• (Lease deed/Ownership Documents) of the property showing the registered office of the partnership
• Permanent Account Number (PAN) of all the Partners of the Partnership

The step-by-step procedure for the conversion from partnership to LLP is as follows- 

Step 1:- Contact Corpseed 

First, contact Corpseed as your one-stop solution provider. 

Step 2:- Corpseed aligns a dedicated professional 

Secondly, Corpseed aligns a dedicated professional to help you transition from Partnership to LLP. 

Step 3:- Obtaining DSC and DIN

Thirdly, we help the partners obtain the Digital signature certificate (DSC) along with the Director identification number (DIN) from the concerned authorities.  

Step 4:- Name Reservation

Within this, we help partners apply for the name reservation for their LLP, with a run-LLP form. The name of the form is to be made different, unlike the same name of the registered LLP company.

Step 5:- Drafting LLP Agreement 

We help you create an agreement that includes the drafting of the LLP. This task is typically carried out by partners, and is important to follow the terms and conditions outlined in the Limited Liability Act of 2008. Additionally, we will guide you through the process to ensure your agreement is comprehensive and adheres to all necessary provisions.

Step 6:- Filing of Form

Soon after, the applications well as the declaration regarding the conversion of the partnership company as converted into an LLP are then informed to the authorities about the application. You need not worry, we have got it all covered.

In regards to the previous step, the partners must submit Form 3 to the Registrar of Companies, along with an LLP agreement or other necessary documents to complete the registration process.

We are here to assist you in completing these steps smoothly. Simply reach out to Corpseed for help.

At Corpseed, we deeply value the immense impact of transitioning businesses in India, i.e. from Partnership to LLP. Our unwavering commitment to ensuring smooth operations and long-term success is rooted in our understanding of the crucial role regulations and requirements play in achieving these goals. We recognize the complexities and challenges entrepreneurs face when navigating the legal landscape and are dedicated to providing comprehensive guidance and support. With our team of experienced experts, we help our clients obtain accreditation, enabling them to achieve their full potential.