Convert Partnership Firm to LLP: Required Documents & Process

In recent times, many traditional partnership firms have been transitioning into Limited Liability Partnerships (LLPs). This growing trend is mainly due to the flexibility and protection LLPs offer. LLPs combine the operational freedom of a partnership with the limited liability benefit of a private limited company, making them a popular choice for small and medium enterprises. One of the most significant advantages of forming an LLP is that the personal assets of partners are safeguarded, reducing financial risk. We provide the best llp registration and partnership firm registration services!

Compared to traditional partnerships, LLPs offer several key benefits such as limited liability, perpetual succession, and no restriction on the number of partners. These features make LLPs a more attractive option for modern businesses.

Key Differences Between Partnership and LLP:

Why Choose LLP Over a Partnership Firm?

Beyond the basic distinctions, several unique features make an LLP a more appealing alternative to a traditional partnership firm:

Freedom in Management & Flexibility:

 LLPs offer considerable flexibility in day-to-day operations. The LLP Agreement governs internal management and is not rigidly controlled by the Limited Liability Partnership Act, 2008, allowing partners to structure the agreement as they see fit.

Perpetual Succession:

 In contrast to partnership firms, an LLP continues to exist regardless of any changes in partnership, such as the death or departure of a partner. This continuity is ensured by its status as a separate legal entity.

Better Investment Potential:

 Due to its organized structure and corporate features, LLPs are more attractive to foreign investors and venture capitalists compared to traditional partnership firms.

Multidisciplinary Collaboration:

 LLPs allow professionals from various fields to collaborate under one structure—an exclusive advantage not offered by standard partnerships.

Conditions for Converting a Partnership Firm into an LLP

• The conversion must comply with Section 55 and Schedule II of the Limited Liability Partnership Act, 2008.
  
  

• All existing partners of the partnership firm must continue as partners in the LLP; no new partners can be added, nor can existing ones exit at the time of application.
  
  

• Every partner must possess a valid Digital Signature Certificate (DSC), and at least two must have a Designated Partner Identification Number (DPIN).
  
  

• The partnership firm should be registered under the Indian Partnership Act, 1932.
  
  

• Consent from all partners is required.
  
  

• Post-conversion, the same partners must continue in the LLP. Any partner wishing to exit may do so only after the conversion is completed.
  
  

• DIN/DPIN must be secured for all designated partners.

Procedure for Converting a Partnership Firm to an LLP

Step I – Name Reservation and Obtaining DSC

a. Name Reservation

• Begin by registering and logging into the MCA portal.
  
  

• Navigate to the “RUN – LLP” option under the MCA Services tab.
  
  

• Select “Conversion of Firm into LLP” from the dropdown menu.
  
  

• Propose two names for the new LLP.
  
  

• Upload any necessary supporting documents in PDF format and click “Submit.”
  
  

• You’ll be directed to the payment gateway to pay a fee of Rs. 200.
  
  

• Once approved, the reserved name is valid for 90 days.
  
  

b. Digital Signature Certificates (DSC)

• All Designated Partners must obtain valid Digital Signature Certificates (DSCs).
  
  

• DSCs are required for signing all e-forms electronically to proceed beyond the name approval stage.
  
  

Step II – Filing Conversion Forms with the Registrar of Companies (RoC)

a. Form 17 – Application and Statement for Conversion

This form includes key details such as:

• SRN (Service Request Number) from the RUN – LLP application
  
  

• Proposed LLP name
  
  

• Existing firm’s name, address, registration number, and partnership agreement details
  
  

• Number of partners and capital contribution
  
  

• Information about secured creditors
  
  

Required attachments:

• Consent statement from all partners
  
  

• Statement of assets and liabilities, certified by a practicing Chartered Accountant
  
  

• Copy of the latest Income Tax Return acknowledgment
  
  

• List and consent letters from secured creditors
  
  

• Any other optional supporting documents
  
  

b. Form FiLLiP – Incorporation Form for LLP

This form should include:

• Auto-filled details from the RUN – LLP form
  
  

• LLP’s registered office address and email
  
  

• Registrar office details
  
  

• Description of business activities
  
  

• Information about all partners and designated partners, including DIN/DPIN and PAN
  
  

• Capital contribution details
  
  

Necessary attachments:

• Proof of registered office address
  
  

• Subscriber’s consent
  
  

• NOC from property owner and recent utility bill (within 2 months)
  
  

• Approvals from any applicable regulatory authorities
  
  

• Details of other companies/LLPs where designated partners hold positions
  
  

• Proof of identity and address of all applicants
  
  

• No Objection Certificate or board resolution if the LLP name resembles any existing LLP or company
  
  

Both Form 17 and Form FiLLiP must be digitally signed by the proposed designated partners and certified by a practicing Chartered Accountant, Company Secretary, or Cost Accountant. The applicable filing fee depends on the LLP’s capital contribution.

Step III – Issuance of Certificate of Registration

Once the application is approved, the Registrar will issue the Certificate of Registration for the LLP.

Step IV – Execution of LLP Agreement

Within 30 days from the date of incorporation, the LLP Agreement must be filed using Form LLP–3. This agreement should include:

• Name of the LLP
  
  

• Names of designated partners and other partners
  
  

• Capital contribution details and profit-sharing ratios
  
  

• Rules and regulations governing the LLP
  
  

• Rights and responsibilities of each partner
  
  

Step V – Notification to Registrar of Firms

The Registrar of Firms must be informed about the conversion into LLP within 15 days from the date of incorporation. This is done using Form–14 and should include:

• A copy of the LLP’s Certificate of Incorporation
  
  

• A copy of the incorporation documents filed via Form FiLLiP
  
  

Once all procedures are completed, the partnership firm is considered successfully converted into an LLP. However, it’s important to note that licenses and permits from the previous entity do not automatically transfer. They must be reapplied for under the new LLP structure.

Documents Required to be Filed

All partners must file a declaration with the Registrar stating the firm’s name, registration number (if applicable), and the date it was registered under the Indian Partnership Act, 1932, or any other applicable law.

Along with this, the incorporation document and a declaration—made by a Chartered Accountant, Company Secretary, Cost Accountant, or Advocate involved in the LLP’s formation, along with any subscriber to the incorporation document—must be submitted confirming compliance with all incorporation requirements.

Registration Process

Upon receiving the required documents, the Registrar will review and may either approve or reject the registration. If everything is in order as per the Act, a Certificate of Registration will be issued.

Within 15 days of registration, the LLP must notify the Registrar of Firms (where the original partnership was registered) by filing Form 14.

If the Registrar denies registration, an appeal may be filed with the appropriate tribunal.

Effect of Registration

• An LLP comes into existence under the name specified in its Certificate of Registration.
  
  

• All assets, liabilities, rights, and privileges previously held by the firm transfer to the LLP.
  
  

• The original firm is dissolved, and if it was registered under the Indian Partnership Act, 1932, it will be removed from the maintained records.
  
  

• Any legal proceedings pending against the firm can now be pursued against the LLP.
  
  

• Orders or judgments made either for or against the firm become enforceable against the LLP.
  
  

• Existing contracts and agreements involving the firm will remain valid with the LLP assuming the role of the party.
  
  

• All current appointments or authorities granted to the firm are transferred as if they were originally conferred on the LLP.
  
  

Partners’ Liability Before Conversion

Each partner remains jointly and severally responsible for all liabilities and obligations incurred by the firm prior to conversion. Should a partner fulfill any such obligation, the LLP will provide indemnification.

Conversion Notice

Within 14 days of registration, and effective for a period of 12 months from that date, the LLP must clearly indicate in every official correspondence that it has been converted from a firm to an LLP. This notice should include:

• A statement confirming that the conversion took place as of the registration date, and
  
  

• The name and, if applicable, the registration number of the original firm.
  
  

Failure to comply with this requirement will result in penalties—a minimum fine of Rs. 10,000 up to a maximum of Rs. 1,00,000. If the non-compliance continues, a fine will be imposed ranging from a minimum of Rs. 50 per day to a maximum of Rs. 500 per day.

LLP Form No. 17

LLP Form No. 17 is used to apply and declare the conversion of a partnership firm into a Limited Liability Partnership (LLP). This form consists of two sections: Part A – Application and Part B – Statement.

Details Required in Part A: Application

• SRN of RUN – LLP Form: If already filed, provide the Service Request Number; otherwise, mention the proposed name of the LLP.
  
  

• Firm Details: Name and address of the existing partnership firm.
  
  

• Registration Information: Mention the registration details under the Indian Partnership Act, 1932 or any other applicable law.
  
  

• Date of Agreement: Date of the partnership agreement which outlines the firm’s formation.
  
  

• Number of Partners in Firm: Total number of existing partners.
  
  

• Number of Partners in LLP: This is auto-filled based on the earlier input.
  
  

• Capital Contribution: Total capital contribution by the partners in the firm.
  
  

• Partner Consent: Confirmation that all partners have agreed to the conversion.
  
  

• Ownership Details: Declaration that all partners of the LLP are the same as those in the partnership firm—no new additions.
  
  

• Income Tax Return: Details of the latest return filed under the Income Tax Act, 1961.
  
  

• Pending Proceedings: Information about any ongoing legal matters before any court, tribunal, or authority.
  
  

• Previous Application Refusal: If any earlier conversion application was rejected, provide its SRN and the reason for rejection.
  
  

• Court Judgements or Orders: Details of any active court or tribunal orders either in favour or against the firm.
  
  

• Secured Creditors: If the firm has secured creditors, confirmation of their consent for conversion must be provided.
  
  

• Regulatory Approvals: Mention whether any approvals are needed for the conversion and whether they have been obtained.
  
  

This form ensures all legal, financial, and procedural details are captured before the firm is officially converted into an LLP.

Part B: Statement

Declaration Contents

• The partner gives formal consent for converting the partnership firm into an LLP.
  
  

• A declaration is made by the partner accepting joint and several liability for all obligations and liabilities of the firm incurred prior to conversion.
  
  

• The partner must also confirm the following:
  – Compliance with all provisions and rules under the LLP Act, 2008.
  – That all existing partners of the firm will continue as partners in the LLP, with no additions.
  – All required regulatory approvals for the conversion have been duly obtained.
  – Consent from all secured creditors has been acquired.
  – All information provided in the form is accurate to the best of their knowledge and belief.
  
  

Attachments Required

• Statement of Assets and Liabilities of the firm, certified as true and correct by a practicing Chartered Accountant.
  
  

• Consent statement from all partners of the firm.
  
  

• List of secured creditors with their written consent for the conversion.
  
  

• Acknowledgement copy of the latest income tax return filed.
  
  

• Approvals from relevant regulatory authorities, if applicable.
  
  

• Optional attachments, if any.
  
  

The e-form must be digitally signed by a designated partner, using their DIN/DPIN. If no designated partner has a DIN, the PAN must be used. A practicing Chartered Accountant, Company Secretary, or Cost Accountant must certify the form. The professional must specify whether they are an associate or a fellow and include their membership or certificate of practice number.

Additionally, Form 14 must be submitted to the Registrar, which includes:

• Name of the original partnership firm
  
  

• Principal address of the firm
  
  

• Registration details under the Partnership Act, 1932 or any other applicable law
  
  

• Details of the LLP into which the firm has been converted
  
  

A copy of the LLP’s Certificate of Incorporation must be attached, and the form should be digitally signed by a partner.