Convert Your Business to LLP

Company form of Business organisation is one of the oldest corporate business organisations available in India. In most of the cases, the owners of these companies will be limited to two persons and nature of management will be in line with a partnership firm. The main disadvantages of limited companies are rigid management structure and compliance, double taxation of company profit and shareholders dividend and high administrative cost.

The other major business organisation is Partnership firms which is an association of persons having unlimited liability and limited resources. Major disadvantage of this form of business organisation are restriction of number of partners, unlimited liability and no perpetual succession as retirement or death of a partner leads to dissolution of the firm.

A registered limited company / Firm can be converted to LLP.

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Conversion of Partnership Firm to LLP

Benefits Conversion of Company to LLP

  • Incorporated status
  • Limited liability for partners from the date of conversion
  • Perpetual Succession
  • More acceptance for the organisation
  • Unlimited number of partners

Criteria for Conversion of Company to LLP

  • All the statutory returns under Income tax Act should be up to date.
  • Consent to be obtained from all the partners for conversion.
  • All the partners should become the partners of LLP and no others can be added at the time of conversion

Procedure for Conversion of Company to LLP

  • Obtaining DPIN for the Designated Partners.
  • Apply for name of LLP
  • Filing of conversion documents in Form 2 and Form 17
  • Filing of LLP Agreement and Consent of Partners and Designated Partners
  • Filing of Form 14 with the Registrar of Firms.

Conversion of Company to LLP

Benefits Conversion of Company to LLP

  • No double taxation as LLP will be taxed as a firm
  • No statutory requirements for holding General Meeting or Board Meeting
  • No restriction regarding number of partners
  • Simple and flexible structure of management.

Criteria for Conversion of Company to LLP

  • There should not be any subsisting charges on assets on the company
  • All the statutory returns under Companies Act & Income tax Act should be up to date.
  • Consent to be obtained from all the shareholders for conversion.
  • All the shareholders should become the partners of LLP and no others can be added at the time of conversion.

Procedure for Conversion of Company to LLP

  • Obtaining DPIN for the Designated Partners.
  • Apply for name of LLP
  • Filing of conversion documents in Form 2 and Form 18
  • Filing of LLP Agreement and Consent of Partners and Designated Partners
  • Filing of Form 14 with the Registrar of Companies.
Do you have a specific query? Contact Us