How To Convert Partnership Into LLP?

A Limited Liability Partnership (LLP) can encourage be a way better business than an everyday partnership. Partnerships are littered with personal liabilities, and LLPs remove excessive regulations of the Indian Partnership Act, 1932. Benefits of LLP- there are tax benefits, no audit requirements below a particular capital, no cap with relevance a no. of partners.

How To Convert Partnership Into LLP?

Benefits of an LLP 

Separate Legal Entity: 

A liability Partnership[LLP] IS a separate legal entity from its partners. partners can sue one another just in case a situation arises. A term of dissolution needs to be mutually arranged by the firm, dissolve. 

Flexible Agreement:

Transferring the ownership of LLP could be a very simple process. an individual is often quickly and simply inducted in as a delegated partner, and also the ownership will switch to them.

Suitable For Tiny Businesses:

LLPs with a capital of but twenty-five lakhs and turnover but 40 lakhs per annum, don’t require any formal audits. for tiny businesses and startups registering as LLP is useful. 

  • An LLP can own or acquire any movable and immovable property because it’s recognized as a juristic person. Partners of an LLP cannot claim the property.

Separate Legal Entity:

  • Starting or beginning a business requires specific requirements to be eligible for registering as an LLP. 
  • The normal partnership structure of an LLP shares identical attributes when it involves internal management, profit distribution, and tax liabilities. But, it offers the partners indebtedness.
  • At least two partners are required to create a liability Partnership [LLP]. there is no limit to the no. of partners in LLP.
  • No shared capital is required or required, though each partner must have an agreed contribution towards it. 
  • Minimum capital contribution: The LLP should have a certified capital of a minimum of Rs. 1 lakh. there’s no minimum capital requirement for an LLP (or an organization, for that matter). 
  • A minimum of one designated partner should be an Indian resident. 
  • DPIN for all Partners of LLP. 
  • Address proof for the office of LLP. The registered office of an LLP doesn’t need to be an advert space. Even a rented home is the registered office, farewell as a NOC is obtained from the owner.
  • The LLPs also will be permitted to choose downstream investment in an exceedingly different company or choose LLP in those sectors which permit 100% FDI in accordance with the automated route.

Steps To Register LLP In India

  •  Arrange basic documents of Partners.
  •  Fill in a web form with accurate information.
  •  Apply for Digital Signature and DIN of Partners.
  •  Prepare all legal documents.
  •  Apply to call availability of the proposed LLP.
  •  File Incorporation Docs with ROC. 
  • Get LLP Incorporation Certificate Drafting of LLP Agreement.
  •  Filing of LLP Agreement.

Step 1: Obtaining DSC And DIN [Direct Identification Number] 

The first step is to get the [DSC] Digital Signature Certificate of the required partners of the indebtedness Partnership. the rationale for this is often that each one of the forms must be submitted online and need the directors’ digital signatures. The law also requires that every director file for a DIN Direct number. the appliance needs to be made in Form DIR- 3.

Step 2: Application For Name Approval.

This process involves registering the LLP. Before doing this, you would like to determine if the name is already taken or not. The registrar only approves names of LLP that don’t seem to be taken before. The acceptance of the name of LLP is made by the Registrar providing the Central Government doesn’t deem it undesirable. The name should also not hold any resemblance to any of the prevailing partnership firms, LLPs, body corporates, trademarks. 

Step 3: LLP Agreement.

LLP agreement is extremely crucial in a very indebted partnership because it determines the mutual rights and duties between the partners, and between the LLP and therefore the  partners. The partners enter into the LLP agreement upon the LLP registration by filing form three online on the MCA portal. This procedure has got to be done within thirty days of the date of incorporation. 

Step 4: LLP Incorporation Certificate.

Memorandum  Association [MOA] and AOA, you’re steps closer to getting your LLP registered. the subsequent step is to induce the LLP Incorporation Certificate. you’ll be able to be intimate by submitting all the documents to the registrar. The time is between 2- 12 days. you’re able to go when Once you get your LLP Incorporation Certificate.

Step 5: Apply For PAN & TAN.

As soon as you get the incorporation certificate, you have got to use it for your company PAN &TAN with the NSDL. it takes around three weeks to urge done. the value for the procedure is a less than Rs.200.

Documents Required For LLP Registration In India. 

  • To Be Submitted By Partners.
  • Scanned copy of Aadhar Card/ Voter’s ID/Passport/Driving License. 
  • Scanned copy of latest bank statement/telephone bill or electricity bill.
  • Scanned passport-sized photograph.
  • Note: anybody of the partners must self-attest the primary 3 documents. For Registered Office Scanned copy of the newest bank statement/mobile bill. Scanned copy of No-objection certificate from the landholder.