Pre-requisites for conversion of Partnership Firm to LLP

• The conversion of Partnership Firm to LLP happens only when the partners of the LLP in which the Partnership Firm conversion is happening, comprises all the partners of the Partnership Firm and no one else.
• All partners should obtain a valid Digital Signature Certificate (DSC) and at least two partners must have a DPIN.
• The consent of all partners is to be obtained for conversion to LLP.
• The conversion encompasses the whole Partnership Firm along with its assets, liabilities, interests, rights, obligations, privileges to be transferred to LLP.

Conditions for Converting a Partnership Firm to an LLP

Converting a partnership firm into a Limited Liability Partnership (LLP) is governed by Section 55 of the Limited Liability Partnership Act, 2008, along with Schedule II of the Act. Here are the key conditions for a successful conversion:

1. All Existing Partners: The conversion must include all current partners of the firm; no new partners can be introduced, and existing partners cannot exit during the application process.
2. Digital Signature Certificate (DSC): Each partner must possess a valid Digital Signature Certificate. Additionally, at least two partners are required to have a Designated Partner Identification Number (DPIN).
3. Registered Partnership: The partnership firm seeking conversion must be registered under the Partnership Act, 1932.
4. Consent of Partners: Consent from all partners is mandatory for the conversion process.
5. Maintaining Partner Structure: The LLP must consist of the same partners as the original partnership firm. Any partner wishing to exit can do so only after the conversion is finalized.
6. DIN/DPIN Requirement: All designated partners must obtain a Director Identification Number (DIN) or a Designated Partner Identification Number (DPIN) prior to conversion.

Procedure for conversion of Partnership Firm and LLP

1. Name application

The reservation of name should be done through web-based form RUN LLP. The name should have the words LLP or Limited Liability Partnership added in the end of the name. The name approved is valid for a period of 90 days from date of name approval within which the e-form 17 and e-from FILLIP for incorporation should be proceeded with.

2. Filing of e-form 17

The e-form 17 is to be filed by applicant for conversion along with the below listed documents:

• List of creditors and consent for conversion
• Existing partnership deed
• Registration certificate of partnership firm
• Latest income tax return acknowledgement copy
• Consent of all partners for conversion
• Statement of assets and liabilities duly certified by CA in practice
• Statement of partners in format per Schedule II
• Any approval required from other authority/ body.

3. Filing of e-form FILLIP (incorporation)

The e-form Fillip is to be filed along for incorporation along with the below listed documents:

• Consent of all partners
• Utility bills not older than 2 months of office with NOC
• Identity proof and address proof of all subscribers
• Copy of signed subscriber’s sheet
• Copy of NOC of existing partnership
• Details of LLP and where the partners are directors or Partners

4. Certificate of Incorporation

The Certificate of Incorporation is issued by the Registrar of Companies (ROC) on approval of the above application and e-forms after successful scrutiny. However, if the same is refused by the Registrar, the applicant can appeal before the Tribunal.

5. Intimation to ROC in Form-14

The LLP shall intimate to ROC within 15 days about such conversion in Form 14 which is a manual form to be signed and submitted to ROC along with the certified copies below documents:

• Certificate of incorporation of LLP
• Incorporation documents submitted

6. LLP Agreement in e-form LLP3

The LLP agreement is to be filed with the Registrar in e-Form LLP3 within 30 days from the date of conversion of Partnership form to LLP. The certificate of incorporation is to be attached too with the LLP agreement.

Once the process of conversion of Partnership firm to LLP is complete, the partnership firm would be deemed dissolved. Further, the LLP being a separate legal entity will have the authority to sue other legal entities and be sued by others. It also aids the partners of the LLP in protecting their assets in the event of a firm’s any unforeseen situations or insolvency or any other circumstance.