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Recent years have shown an increase in the shift from traditional partnerships to Limited Liability Partnerships (LLPs). The real driving force behind the shift is the fact that LLPs offer significant advantages in terms of limited liability. Since LLP’s are a hybrid of both a partnership and a private limited company it decreases the strain put on the personal assets of the partners . This kind of organisation structure suits small and medium-sized business concerns and professionals very well. Important points regarding LLPs Limited Liability Partnership Act, 2008 governs the limited liability partnership An LLP is required to be registered with the ministry of corporate affairs . an unregistered LLP is considered as partnership under the Partnership Act ,1932 and its liability will be unlimited if it fulfills the requirement of a partnership LLP agreement is public document and is available at registered office Only the names that are not similar to an existing company or LLP name or that are not illegal are to be allowed The name of the entity will end with LLP A minimum of 2 persons are required to start an LLP ,one of whom must be a resident of India . No maximum limit of partners is specified Liability is restricted to the amount of capital agreed to be contributed by the partners in the event of winding up of the partnership In cases of fraud by the LLP the liability is unlimited and partner is guilty of fraud is also liable to unlimited extent Benefit of LLPs Freedom of Management/Flexibility: a reasonable level of flexibility is given to The partners in conducting the operations and running the day to day affairs of the LLP. moreover the Limited Liability Partnership Act, 2008, is comparatively flexible on the way the agreement can be drawn up. Perpetual Succession: The death of the partner does not affect the existence of the LLP, Unlike in the traditional partnership . The feature of being a separate legal entity of the LLP allows it to carry on business. Investment Attraction: Foreign investors and venture capital funds look at LLPs as an investment opportunity because of having a corporate structure and being more organised as opposed to traditional partnerships. Multidisciplinary LLPs: It is an exclusive feature and an advantage of LLP that professionals of various disciplines can work together in an LLP with more ease.
To Obtain Converted LLP
- Obtaining DSC And DIN
- Application For Name Approval
- LLP Agreement
- LLP Incorporation Certificate
- Application For PAN & TAN & Bank Account
Obtaining DSC of the desired partners of Limited Liability Partnership is the first step of the process as all the forms are required to be submitted online and the directors' digital signatures are needed for that. Also there is a requirement for all the directors to file for a DIN number. The application needs to be made in Form DIR- 3.
Registration of the LLP is involved in this step . One needs to check whether the name has already been taken. Free search facility of MCA portal can be availed for this purpose . Registration of only those names of LLP are approved by the Registrar that have not been taken before. If the Central Government does not deem it undesirable , the Registrar will approve of the name . There should not be any resemblance in the name to any of the existing partnership firms, LLPs, trademarks, or body corporates.
LLP agreement determines the mutual rights and duties amongst the partners, and between the LLP and the partners hence it is very important in a limited liability partnership . The LLP agreement is entered upon by partners for the LLP registration by filing form 3 online on the MCA portal within a span of 30 days of the date of incorporation, this procedure needs to be completed .
Once the MOA and AOA are approved by the registrar, the next step is to get the LLP Incorporation Certificate. It is done by submitting all the required documents to the registrar. It may take between 2- 12 days to issue the LLP Incorporation Certificate
After getting the incorporation certificate, one needs to apply for PAN & TAN with the NSDL. It may take around three weeks to get done , at a nominal cost of Rs 200
Documents Required for Convert Partnership Company to an LLP
Service Request Number (SRN) of the Reserve Unique Number – LLP form.
Name of the LLP that is proposed.
Details of the firm such as Name, address, registration and partnership agreement .
Information regarding the number of partners and capital contribution to be provided.
Secured creditors details.
Statement of Consent of Partners of the firm.
Statement of assets and liabilities of the firm certified by a Chartered Accountant in practice.
Copy of the latest Income Tax Return acknowledgement.
Consent of all the secured creditors
Any other supporting information (optional).
Address proof of the registered office of the LLP.
Subscriber’s consent.
NOC from the property’s owner and copy of utility bills (not more than 2 months old).
Approval of any regulatory authority, where necessary.
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