Conversion of partnership firm into an LLP (Limited Liability Partnership)
Prerequisites:
1. The firm should be registered as a partnership.
2. There should be consent of all the partners.
3. All partners should become partners in the LLP.
4. Every partner should contribute to the LLP.
5. DPIN (Designated Partner Identification Number) should be acquired for all the Designated Partners.
6. DSC (Digital Signature Certificate) should be acquired for two designated partners.
Partners and Designated Partners.
1. A minimum of two partners will be required for formation of an LLP. There will not be any limit to the maximum number of partners.
2. Appointment of at least two “Designated Partners” shall be mandatory for all LLPs. “Designated Partners” shall also be accountable for regulatory and legal compliances, besides their liability as ‘partners, per-se”.
3. At least one of the Designated Partners should be an Indian resident.
4. Any individual or body corporate may be a partner in a LLP. However an individual shall not be capable of becoming a partner of a LLP, if—
a. He has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;
b. He is an undischarged insolvent; or
c. He has applied to be adjudicated as an insolvent and his application is pending.
5. In case of a LLP in which all the partners are bodies corporate or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.
Steps for conversion -
I. Step 1 –Acquiring DPIN (Designated Partner Identification Number)
Every Designated Partner would be required to obtain a “Designated Partner’s Identification Number” (DPIN) on the lines similar to “Director’s Identification Number” (DIN) required in case of directors of companies.
a. Making an application for DPIN.
b. Receipt of provisional DPIN.
c. Certification/attestation of Director’s personal details.
d. Certification to be sent to MCA cell for approval.
II. Step 2 –Application for Name Availability
Every limited liability partnership shall have either the words “limited liability partnership” or the acronym “LLP” as the last words of its name. Application for name availability is made in Form 1.
III. Step 3 –Documentations required
a. An LLP agreement should be made.
b. Form 17 –an application for the conversion has to be made.
c. Form 2 –Statement by promoter.
d. Form 3 –Contains information on LLP agreement.
e. Form 4 & 9 –Notice of consent and Details of Designated Partners.
f. A Subscripttion Sheet signed by promoters.
g. A copy of stamped LLP Agreement.
h. Proof of address of registered office.
Following documents have to be attached under Form 17.
a. Statements of partners.
b. Statement of Assets & Liabilities certified by Charted Accountant.
c. List of unsecured creditors along with their consent of conversion.
IV. Step 4 –Registration & acquiring Certification of Incorporation
a. LLPs shall be registered with the Registrar of Companies (ROC) (appointed under the Companies Act, 1956) after following the provisions specified in the LLP Act. Every LLP shall have a registered office.
b. An Incorporation Document subscribed by at least two partners shall have to be filed with the Registrar in a prescribed form. Contents of LLP Agreement, as may be prescribed, shall also be required to be filed with Registrar, online.
c. Payment of required fees.
d. All the documents have to be submitted with the RoC (Registrar of Companies).
e. The changes prescribed by Roc have to be made in the LLP Agreement and other documentations.
