Convert a Partnership to an LLP

Under a Limited Liability Partnership (LLP), two or more partners form a special partnership and have limited liabilities. For converting a partnership to an LLP, you need to get a Digital Signature Certificate, a DPIN and file the LLP forms 2, 3 and 17.

To avail our services, we charge 499/- as an advance or security payment.

Partnership to LLP

Overview on Convert a Partnership to an LLP

A Limited Liability Partnership (LLP) can prove to be a much better business vehicle than a regular partnership. Partnerships are affected by personal liabilities, and LLPs remove excessive regulations of the Indian Partnership Act, 1932. Furthermore, there are tax benefits, no audit requirements below a certain capital, no cap with regard to a number of partners or capital contribution requirements.

Benefits of Convert a Partnership to an LLP

Separate Legal Entity:
    • An LLP is a separate legal entity from its partners. Each partner can sue the other in case a situation arises.
    • It has an uninterrupted existence that follows perpetual succession, i.e, the partners might leave, but the business will remain. A term of dissolution has to be mutually agreed upon by the firm, to dissolve.
Flexible Agreement:

Transferring the ownership of LLP is simple. A person can be quickly inducted in as a designated partner, and the ownership will switch to them.

Suitable For Small Business:
    • LLPs with a capital of less than 25 lakhs and turnover less than 40 lakhs per year, do not require any formal audits. It makes registering as LLP beneficial for small businesses and startups.
    • An LLP can own or acquire property because it is recognized as a juristic person. Partners of an LLP cannot claim the property as theirs.
No Owner /Manager Distinction:

An LLP has partners, who own and manage the business. This is different from a private limited company, whose directors may be different from shareholders. For this reason, venture capitalists do not invest in the LLP structure.

Checklist qualities for Convert a Partnership to an LLP

    • Starting a business requires specific requirements to be eligible for registering as an LLP.
    • The normal partnership structure of an LLP shares the same attributes when it comes to internal management, profit distribution, and tax liabilities. But, it offers the partners less financial liability (limited liability).
    • Any business who has, at least two partners are required to form an LLP. There is no limit to the maximum number of partners.
    • The nomination of a natural person, if a body corporate is a Partner.
    • No shared capital requirement, though each partner must have an agreed contribution towards it.
    • Minimum capital contribution: There is no minimum capital requirement for an LLP (or a company, for that matter). The LLP should have an authorized capital of at least Rs. 1 lakh.
    • At least one designated partner has to be an Indian resident
    • DPIN for all Partners
    • DSC (Digital signature certificate) for all the Designated Partners
    • Address proof for the office of LLP. The registered office of an LLP does not have to be a commercial space. Even a rented home can be the registered office, so long as an NoC is obtained from the landlord.
    • With regard to the changes in FDI regulations dated November 10, 2015, foreign investors are now permitted to have 100% FDI automatically. The 100% FDI in LLP is granted to foreign companies who operate in activities or sectors where 100% FDI is considered permissible through the channels of the automatic route. Also, there should not be any performance pre-requisites that are linked to FDI. A definite interpretation of the terms such as ‘ internal accruals’ and ‘ownership and control’ has been provided with reference to the LLP. Thus, Foreign investment is made smoother and quicker with FDI in LLP.
    • The LLPs will also be permitted to opt for downstream investment in a different company or even choose LLP in those sectors which allow 100% FDI in accordance with the automatic route. This does not come up with any performance constraints that are FDI linked.

Documents required for Convert a Partnership to an LLP

The method of LLP registration in India does not require much legwork when it comes to documents.

To Be Submitted By Partners
    • Scanned copy of PAN Card or passport (Foreign Nationals & NRIs)
    • Scanned copy of Aadhar Card/ Voter’s ID/Passport/Driver’s License
    • Scanned copy of latest bank statement/telephone/mobile bill or electricity/gas bill
    • Scanned passport-sized photograph Specimen signature (blank document with signature [partners only])
    • Note: Any one of the partners must self-attest the first three documents. In the case of foreign nationals and NRIs, all the documents must be notarized (if currently in India or a non-Commonwealth country) or apostilled (if in a Commonwealth country).
For Registered Office
    • Scanned copy of the latest bank statement/telephone/mobile bill, or electricity or gas Bill
    • Scanned copy of the notarised rental agreement in English
    • Scanned copy of No-objection certificate from the property owner
    • Scanned copy of sale deed/property deed in English (in case of owned property)

procedure for Convert a Partnership to an LLP

Step 1

We help you avail (DSC) Digital Signature Certificate and (DPIN) Designated Partner Identification Number for all the Partners

Step 2

We file your application along with Form 17 and the required documents.

Step 3

We help you with the post-conversion formalities and compliances.

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FAQs on Convert a Partnership to an LLP

    • Address proof of the office
    • Regulatory authority’s approval
    • Details of all the partners and directors
    • Consent of all the partners and directors
    • Latest income tax return filing
    • NOC from tax authorities
    • Creditors and their consent
    • Certified liabilities and assets of the partnership
    • All the partners must obtain a DSC
    • Next, they must obtain a designated partner identification number
    • Once this is done, the company must look to get their name approved
    • The name must include LLP at its end
    • File LLP forms 17, 2, and 3
    • At least seven partners.
    • Share capital worth at least INR 1 lakh
    • Capital must be divided into either units or shares
    • Object Clause from the partnership firm’s Memorandum of Association
    • DSC and DIN of all the partners
    • Memorandum of Association of the partnership
    • Articles of Association
    • Copy of the application for name approval
    • NOC from the property owner
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