How to Convert your Partnership to LLP?

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The shift from traditional partnerships to Limited Liability Partnerships (LLPs) has increased in recent years. The reason behind this is that LLPs offer more flexibility, unlimited partners and the like

The shift from traditional partnerships to Limited Liability Partnerships (LLPs) has increased in recent years. The reason behind this is that LLPs offer more flexibility, unlimited partners and the like. But the real reason behind the shift is due to the fact that LLPs offer a major advantage in terms of limited liability. The strain on the personal assets of the partner is put to rest when it comes to LLPs since they are of both a partnership and a private limited company. Small and medium-sized businesses find this organisation structure to suit their needs very well.

The advantages of the Limited Liability Partnership (LLP) form of business outweigh those of the traditional partnership. Limited liability, perpetual succession and unlimited partners are the key incentives for a partnership firm to convert itself into an LLP.

Eligibility for the conversion of Partnership Firm to LLP

  1. The partnership firm must be registered under the Indian Partnership Act, 1932.
  2. If the firm is not registered under the Indian Partnership Act, 1932 then the name of the Statute under which it is registered has to be mentioned at the time of conversion.

Important Points for Conversion of Partnership to LLP

  • The first thing you need to do while the conversion of a partnership into an LLP is to get a DSC (Digital Signature Certificate). All the partners will require a digital signature.
  • Then, obtain a DPIN (Designated Partner Identification Number). It is mandatory for at least two partners in order to proceed with the conversion. It is a one-time number. There is no renewal or anything associated.
  • Next, apply for name approval. The name should be selected carefully. Limited Liability Partnership will be used at the end of the company’s name.
  • Finally, file LLP Form 17, LLP Form 2 and LLP form 3 for the conversion. Certain documents are required along with the form.

Documents include

  • Address proof of registered office,
  • Approval by the regulatory authority,
  • Details of the partnership (including details of partners and directors)
  • Consent of all the partners,
  • Copy of the latest income tax return (can be an acknowledgement),
  • No Objection Certificate from tax authorities,
  • List of creditors and their consent, and
  • List of certified liabilities and assets.
  • After the successful filing of all the documents along with prescribed fees, verification will take place. After which, a certificate will be issued to you. Hence, completing the conversion of your partnership into a Limited Liability Partnership successfully.

On successful conversion of Partnership Firm into LLP, the Registrar will issue a Certificate of Incorporation of LLP and all the properties, assets, interests, rights, privileges, etc. of the firm are now transferred to the LLP. In other words, the complete undertaking of the firm is transferred to the LLP.

However, any approval that is issued under any law to the Partnership Firm will not be automatically transferred to the Limited Liability Partnership. Therefore, fresh licenses or any registrations may be required. This aspect of the conversion of a Partnership into LLP must be well considered before the conversion process.

Converting your Partnership Firm into an LLP (Limited Liability Partnership) in India is a legal, tax-efficient, and liability-limiting move—especially useful for growing businesses. The LLP structure offers the flexibility of a partnership and the benefits of limited liability.

Here’s a step-by-step guide to help you convert your partnership into an LLP under the LLP Act, 2008:

✅ Prerequisites for Conversion

Before you start, ensure:

  1. The partnership firm is registered under the Indian Partnership Act, 1932
  2. All partners of the firm will become partners in the LLP—no new or fewer partners allowed during conversion
  3. Digital Signature Certificate (DSC) for all partners
  4. Designated Partner Identification Number (DPIN/DIN) for at least 2 partners
  5. No pending legal proceedings or unsettled debts

🔁 Step-by-Step Process to Convert Partnership to LLP

📍 Step 1: Apply for Digital Signature (DSC)

  • Each partner must have a valid DSC to file forms online with the Ministry of Corporate Affairs (MCA).

📍 Step 2: Apply for DIN/DPIN

  • At least two partners must have DPIN/DIN.
  • Can be applied directly while filling Form FiLLiP (incorporation form for LLP)

📍 Step 3: Name Reservation

  • File RUN-LLP (Reserve Unique Name) on MCA portal
  • Check availability and ensure the name includes “LLP” or “Limited Liability Partnership”
  • Alternatively, reserve the name while filing Form FiLLiP

📍 Step 4: File Form FiLLiP (LLP Incorporation)

  • This form includes:
    • Details of proposed LLP
    • Partners’ information
    • Registered office address
    • Subscriber statements

Attach:

  • Consent of partners
  • Utility bill & NOC from premises owner (for registered office)

📍 Step 5: File Form 17 (Application for Conversion)

Form 17 is specifically for converting a partnership firm into an LLP.

Attachments Required:

  • Statement of Consent from all partners
  • Copy of partnership deed
  • Registration certificate of the existing firm
  • Statement of assets & liabilities certified by CA
  • List of creditors and their consent (if any)
  • Latest income tax return acknowledgment

📍 Step 6: LLP Agreement Filing (Form 3)

  • Draft and file the LLP Agreement within 30 days of incorporation
  • Should include:
    • Profit-sharing ratio
    • Capital contribution
    • Rights and duties of partners
    • Rules for dispute resolution

📜 After MCA Approval

Once approved:

  • MCA issues a Certificate of Registration of LLP
  • The firm is deemed to be dissolved and removed from the Registrar of Firms

🔄 Post-Conversion Formalities

Task Action
PAN Update Apply for new PAN in LLP name
Bank Account Update bank details or open a new account
GST Amend existing GST or apply afresh in LLP’s name
Stationery & Branding Update invoices, letterheads, and website
Inform stakeholders Vendors, clients, employees, government departments

🧠 Benefits of Conversion

Benefit Why It Matters
🔒 Limited Liability Partners’ personal assets protected
🧾 Tax-efficient LLPs are taxed like partnerships, no dividend distribution tax
📚 Perpetual Succession Independent legal identity
🏛 Better Compliance More credibility in the eyes of banks & investors

⚠️ Points to Remember

  • All assets, liabilities, licenses, and contracts of the partnership are transferred to the LLP.
  • Ensure you comply with ROC filings post-conversion.
  • Conversion does not attract capital gains tax under Section 47(xiiib) of the Income Tax Act (subject to conditions).

🧾 Forms Summary

Form Purpose
RUN-LLP Name reservation
FiLLiP LLP incorporation
Form 17 Application for conversion of firm to LLP
Form 3 LLP Agreement filing

📌 Conclusion

Converting a partnership to an LLP is a smart, structured, and future-ready move. It offers legal protection, flexible operations, and long-term benefits—especially for growing or professional businesses.

Would you like:

  • A checklist of required documents?
  • A sample LLP Agreement template?
  • Help filling MCA forms step-by-step?

Let me know—I can guide you through the entire process!

CONVERSION INTO LLP

How to Convert your Partnership to LLP?

partnership firm to llp conversion guide

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