STEPS FOR CONVERSION OF PARTNERSHIP FIRMS INTO LIMITED LIABILITY PARTNERSHIP (LLP)
I. Obtain Digital Signature:
Every Partners in a partnership firms must obtain the Digital Signature Certificate as it will be required for filing of various e-forms with Ministry for conversion.
II. Name Approval:
The applicant needs to file for reservation of name for the proposed LLP through Ministry of Corporate Affairs. The name must be obtained before filing the forms for conversion of partnership firms into LLP.
III. Filing of forms for Incorporation:
Once the name got approved through RUN, the forms for Incorporation of LLP needs to be filed. If the proposed Designated Partner is not having Designated Partner Identification Number (DIN) we can apply the same along with incorporation forms (Maximum 2).
Following documents and information is required for filing of e-forms:
· Capital of Proposed LLP and Contribution of Proposed Partners
· Phone No. and E-Mail Id of Proposed Partners
· Identity Proof of the Partners (Voter Id Card/Driving Licence/Passport)
· Latest Utility Bill (Not Older Than 2 Months) (for Registered Office)
· Registered Office Proof (Allotment Letter/ Possession Letter/ Sale Deed/ Rent Agreement)
· PAN of all Partners
· Bank Statement of partners as address proof
Following documents needs to be attached along with e-forms:
· Subscriber Sheet Including Consent.
· Proof of Address of Registered Office of the LLP which includes NOC of the Owner.
· Main Object.
· Details of LLP or Company if the proposed Designated Partner /Partner is Director or Partner of any other Company or LLP respectively.
IV. Filing of Form 17
Application and statement of Conversion of Partnership into LLP (form 17) needs to be filed. This form needs to be filed along with the application for incorporation. It includes the declaration by a partner of the LLP. And shall be digitally signed by the partner and Certified by the practicing professionals.
Following documents needs to be attached to form 17:
· Statement of consent of partners of the firm.
· Statement of Assets and Liabilities of the firm duly certified as true and correct by the Chartered Accountant in practice.
· Copy of acknowledgement of latest income tax return.
· List of all the secured creditors along with their consent to the conversion
V. Filling of Form-3: Information with regard to limited liability partnership agreement and changes, if any, made therein. Copy of the Agreement should be attached to the e-form.
Ø The precondition for conversion for your partnership firm is:
· Partnership should be a registered under Indian partnership Act 1932.
· All the partners of existing firm should compulsorily become the partners of LLP.
· Minimum 2 partners as Designated Partners and one of them should be Resident in India.
· Registered Office for the existing partnership firm.
Ø Effects of conversion:
Once the firm gets registered as LLP:
- All tangible and intangible property, all assets and liabilities, etc. relating to the firm and shall be transferred to the LLP without further act or deed.
- The firm will be dissolved and removed from records maintained under the Indian Partnership Act, 1932.
- All the pending proceedings by and against the firm shall continue in the same manner in the name of LLP.
- All rulings, orders and judgements against the firm shall be now against the LLP.
- All existing agreements and contracts, including contract of employment shall continue with LLP.
However, every partner of the firm will continue to be personally liable to obligations and liabilities of the firm that incurred before the conversion of firm into LLP.
Disclaimer:
The Views expressed are solely of the Author and the contents of this article is to share the Knowledge on subject matter. Expert advice should be sought for your specific circumstances.
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