Convert Partnership Into LLP in India
Seamless & Legally Compliant LLP Conversion
Convert your partnership firm into a Limited Liability Partnership (LLP) with ease. Tax Pal Solutions ensures your new structure gains full legal recognition, provides limited liability protection, and complies with all MCA norms.
- End-to-end LLP conversion support
- Expert guidance on ROC filings and MCA compliance
- Assistance in drafting and filing LLP Agreement
- Quick DPIN and Digital Signature procurement
- Complete legal and tax compliance ensured
Customer Ratings
| Platform | Rating | Reviews |
|---|---|---|
| 4.6 / 5 | 6333 | |
| Trustpilot | 4.0 / 5 | 1907 |
What Sets Us Apart
| Feature | Details |
|---|---|
| MCA Certified Experts | 500+ |
| Trusted Reviews | 10,000+ |
| Monthly Client Onboardings | 2,500+ |
| Coverage | Serving businesses across India |
Why Convert a Partnership to an LLP?
Converting a partnership to an LLP offers:
- Limited Liability: Protects personal assets from business debts.
- Separate Legal Identity: LLP can own assets, enter contracts, and sue or be sued in its name.
- Management Flexibility: Designated partners handle operations; others can contribute capital.
- Perpetual Succession: LLP continues despite changes in partners.
- Better Credibility & Access to Funding: Recognized legal entity with professional image.
- Tax Advantages: No Dividend Distribution Tax (DDT); potential carry-forward of losses.
- Ease of Ownership Transfer: Adding or removing partners is simpler than in a traditional partnership.
Key Differences: LLP vs Partnership Firm
| Particulars | LLP | Partnership Firm |
|---|---|---|
| Governing Law | LLP Act, 2008 | Indian Partnership Act, 1932 |
| Registration | Mandatory | Optional |
| Registering Authority | RoC | Registrar of Firms |
| Legal Status | Separate legal entity | Not separate; partners liable |
| Liability | Limited to capital contribution | Unlimited liability |
| Annual Filing | Statement of Accounts & Annual Return | No annual filing requirement |
| Management & Administration | Designated partners manage compliance | All partners manage equally |
| Perpetual Succession | Continues regardless of partner changes | Dissolves upon partner changes |
| Maximum Partners | No limit | Max 50 partners |
| DPIN & DSC Requirement | Required for designated partners | Not required |
| Asset & Property Ownership | Owned by LLP | Jointly owned by partners |
| Contracting Power | Can contract in LLP’s name | Contracts in partners’ names |
Eligibility Criteria for LLP Conversion
- Partnership firm must be registered under the Indian Partnership Act, 1932.
- All partners must unanimously agree to the conversion.
- No security interest on assets at the time of conversion.
- Minimum of two designated partners, each with valid DPIN and DSC.
- Compliance with all pending legal, financial, and tax requirements.
- No partner should be disqualified under Section 5 of LLP Act, 2008.
Step-by-Step LLP Conversion Process
Step 1: Name Approval & Digital Signatures
-
Reserve LLP name via MCA portal (RUN-LLP).
-
Obtain Digital Signature Certificates (DSC) for designated partners.
Step 2: File Required Forms with RoC
| Form | Purpose |
|---|---|
| Form 17 | Application for conversion (includes partner info, assets & liabilities) |
| Form FiLLiP | LLP Incorporation application (includes registered office, partners, business activities) |
Step 3: Certificate of Registration
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RoC issues Certificate of Registration for the new LLP.
Step 4: Execution of LLP Agreement
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File Form LLP-3 within 30 days of incorporation, detailing partners, capital, profit-sharing, and rules.
Step 5: Notification to Registrar of Firms
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File Form 14 within 15 days of incorporation with LLP incorporation documents.
Documents Required
Partners’ Documents:
- PAN Card / Passport (for NRIs & Foreign Nationals)
- Aadhaar / Voter ID / Driver’s License
- Recent bank statement or utility bill
- Passport-sized photograph and specimen signature
Registered Office Documents:
- Latest utility bill
- Notarized rental agreement (if rented)
- No-Objection Certificate from property owner
- Sale deed or property deed (if owned)
Conversion Costs
| Cost Component | Typical Charges |
|---|---|
| Name Reservation (RUN-LLP) | ₹200 |
| LLP Incorporation & Conversion | ₹500 – ₹25,000 (based on capital contribution) |
| Filing LLP Agreement (Form 3) | Starts ₹50; late fee ₹100/day |
| Digital Signature Certificates | ₹800 – ₹1,500 per partner |
| Professional Fees | ₹5,000 – ₹20,000+ |
| Stamp Duty on LLP Agreement | Usually 1% of capital |
| PAN & TAN Application | PAN: ₹66, TAN: ₹77 |
| Miscellaneous Expenses | ₹500 – ₹2,000+ |
Tax & GST Implications
Income Tax:
- No capital gains tax if all assets/liabilities and partners remain the same.
- Carry forward of losses and unabsorbed depreciation allowed.
GST:
- LLP must obtain a new GST registration.
- Transfer unutilized Input Tax Credit (ITC) via Form GST ITC-02.
- Surrender old partnership GST registration within 30 days.
Post-Conversion Compliance:
- Dissolution of old partnership firm.
- Transfer of all assets, liabilities, and contracts to LLP.
- Continuation of ongoing legal proceedings.
- Partners enjoy limited liability.
Common Challenges & Solutions
- Documentation Errors: Ensure complete and accurate paperwork.
- Partner & Creditor Consent: Obtain unanimous consent and NOCs.
- Transfer of Assets/Liabilities: Properly update all contracts, registrations, and licenses.
- Tax & Financial Implications: Review income tax and GST requirements carefully.
- Employee & Stakeholder Communication: Plan smooth transition for contracts, benefits, and clients.
Certification
