Procedure of Conversion of a Partnership Firm into LLP
A partnership firm comes into existence when two or more people join hands for conducting business. For starting any business, everybody requires capital which is to be invested in a firm but in case of partnership the liability is unlimited. Some people who earlier starts an unlimited liability partnership but are unable to cope up with liabilities plans to shift to limited liability partnership. In this case, the partners have to go through a proper procedure to convert the partnership firm into a limited liability partnership, which is:
· Step 1: Obtain Designated Partners identification number for the designated partners and directors’ identification number for the rest of the partners.
· Step 2: Apply for the application of allotment of DPIN under eform 7
· Step 3: Decide the name with which the LLP is to be incorporated and get it registered.
· Step 4: Get Approval from the registrar, in case no other firm is using the same name or it is not undesirable.
· Step 5: File an application in eform 1 with the proposed name and fill the application fee through a credit card.
· Step 6: Application for the conversion of firm into a LLP is to be made through form 17.
· Step 7: Along with the application attach the following documents
1. Statement of partners in the firm.
2. Incorporation document and statement filed in form 2.
3. Statement of assets and liabilities of the firm attested by the chartered accountant.
4. List of the creditors along with their consent for the conversion.
5. Approval from governing council authorities.
6. NOC from Income Tax authorities.
7. Particulars of pending proceedings from any court.
8. If any, rejection letter from the registrar for the conversion.
9. Particulars of rulings, judgements, orders of the court in favour or against the firm if any subsist.
10. Other optional documents if any asked by the registrar.
· After submitting all the documents with the registrar and if he is satisfied then he will permit for the conversion and will issue the certificate for the conversion under the act.
· The LLP has to ensure that for the next 12 months, it has to comply with a statement that it was converted from a firm to LLP and use the name and registration number of the firm.
· In case if any LLP fails to comply with the above condition then they will be penalised with a fine as decided by the registrar.