Partnership to LLP
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Partnership and Limited Liability Partnership (LLP) are both business structures involving multiple individuals collaborating in a venture, yet they diverge notably in terms of liability, legal status, governance, and compliance. In a partnership, all partners assume unlimited liability, collectively sharing profits, losses, and liabilities. This means personal assets are at risk to settle business obligations. Conversely, an LLP offers limited liability to its partners, safeguarding their personal assets from the company’s debts and liabilities. While partnerships lack a distinct legal identity and follow the Indian Partnership Act, 1932, LLPs operate as separate legal entities under the Limited Liability Partnership Act, 2008, possessing the ability to enter contracts, own assets, and sue or be sued in their name. Partnerships typically have more flexible governance structures and fewer statutory requirements compared to LLPs, which necessitate registration, compliance filings, and adherence to formalities mandated by the LLP Act. The choice between the two structures hinges on factors like risk tolerance, liability concerns, governance preferences, and long-term business objectives, guiding entrepreneurs in selecting the most suitable framework for their collaborative ventures.
Documents Required for Partnership to LLP Conversion
Converting a partnership into a Limited Liability Partnership (LLP) involves specific documentation and formalities. Here’s a general list of documents commonly required for Partnership to LLP conversion in India:
Application for LLP Incorporation:
- Form 17: Application and statement for the conversion of a firm into an LLP.
- Form 2: Incorporation document and subscriber’s statement.
Partnership Deed:
- Certified copy of the partnership deed.
Consent of Partners:
- Consent of all partners for the proposed conversion.
Statement of Assets and Liabilities:
- Statement of assets and liabilities of the partnership firm audited by a practicing Chartered Accountant.
Identity and Address Proof:
- PAN cards and identity proofs (Aadhaar card, passport, voter ID, etc.) of all partners.
- Address proofs (passport, voter ID, utility bills, bank statement, etc.) of all partners.
No Objection Certificate (NOC):
- NOC from all creditors, if any, and other concerned authorities.
Registered Office Proof:
- Documents validating the registered office address of the LLP, such as rental agreement, lease deed, electricity bill, property tax receipt, etc.
Designated Partners Details:
- Details of designated partners, including their DIN (Director Identification Number) if applicable.
LLP Agreement:
- Draft LLP agreement specifying the rights, duties, and responsibilities of partners in the LLP.
Financial Statements:
- Audited financial statements of the partnership firm for the past three years, if applicable.
The specific documents required might vary based on the circumstances and regulatory requirements. It’s advisable to consult with a professional or legal advisor specializing in company conversions to ensure compliance with all necessary regulations and to gather the correct documentation for the conversion from a partnership to an LLP. Additionally, the process for conversion involves filing forms with the Registrar of Companies (RoC) and paying requisite fees as per the guidelines.