Take over of proprietorship firm by LLP
This query is : Resolved
Anil Gupta
(Querist)
30 September 2021
What are the tax implications from Income Tax Point of view
CA R SEETHARAMAN
(Expert)
30 September 2021
No tax implications
The 1st Step is to incorporate a new LLP by filing e-form FiLLiP for reserving the name and incorporating the LLP.
Attachments/Documents required to be filed.
a. Latest passport size Photographs of all partners;
b. Proof of identity of each partner – Aadhar Card/Passport/Driving License/Voter ID;
c. Proof of residence of each partner – Bank Statement/Passbook/electricity bill/ telephone bill/any utility bill;
d. PAN card of all Partners;
e. Proof of Proposed registered office – Electricity Bill along with Rent Agreement OR ownership proof of proposed registered office;
f. Subscribers sheet including consent of each partner;
g. Interest of partners in other entities;
h. Copy of BR (in case Body Corporate is Partner) (also it shall mention the name and address of an individual nominated to act as nominee/designated partner on its behalf).
> STEP-2 Filing of LLP Agreement:
After Incorporation of LLP, the partners of the LLP must enter into LLP Agreement (which must include an enabling clause of conversion from sole proprietorship to LLP)
After entering into agreement it shall file the same with the ROC within 30 days of incorporation in e-form 3.
What Document require? Stamp paper for LLP Agreement of State where LLP is to be incorporated.
> Note –
a. An LLP agreement must include the clause regarding the acquisition of sole proprietorship;
b. All the assets and liabilities of the proprietor immediately after the conversion become the assets and liabilities of the LLP;
c. All movable and immovable properties of the proprietor automatically vests in the LLP. Thus No Capital Gains tax shall be charged on transfer of property from Proprietorship firm to LLP.
The 1st Step is to incorporate a new LLP by filing e-form FiLLiP for reserving the name and incorporating the LLP.
Attachments/Documents required to be filed.
a. Latest passport size Photographs of all partners;
b. Proof of identity of each partner – Aadhar Card/Passport/Driving License/Voter ID;
c. Proof of residence of each partner – Bank Statement/Passbook/electricity bill/ telephone bill/any utility bill;
d. PAN card of all Partners;
e. Proof of Proposed registered office – Electricity Bill along with Rent Agreement OR ownership proof of proposed registered office;
f. Subscribers sheet including consent of each partner;
g. Interest of partners in other entities;
h. Copy of BR (in case Body Corporate is Partner) (also it shall mention the name and address of an individual nominated to act as nominee/designated partner on its behalf).
> STEP-2 Filing of LLP Agreement:
After Incorporation of LLP, the partners of the LLP must enter into LLP Agreement (which must include an enabling clause of conversion from sole proprietorship to LLP)
After entering into agreement it shall file the same with the ROC within 30 days of incorporation in e-form 3.
What Document require? Stamp paper for LLP Agreement of State where LLP is to be incorporated.
> Note –
a. An LLP agreement must include the clause regarding the acquisition of sole proprietorship;
b. All the assets and liabilities of the proprietor immediately after the conversion become the assets and liabilities of the LLP;
c. All movable and immovable properties of the proprietor automatically vests in the LLP. Thus No Capital Gains tax shall be charged on transfer of property from Proprietorship firm to LLP.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Late Filing Fee Waiver for Q1 Form 144 (Earlier 27Q) – Transition to Income-tax Act, 2025
- Employee secondment
- IMS (import of goods) ITC related
- GST ITC as per notification 12/2023- central tax
- Gift to nri relatives resides in usa
- Capital Gains Tax on Inherited Mutual Fund
- Form 144 TDS Return Validation Error – Mandatory Fields
- Form 144 TDS Return Validation error
- LLP audit and disclosure
- Applicability of tax on invoice
- Ito add credit side of bank
- Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
