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Partnership firm

Natasha (Student) (51 Points)

23 January 2014

I would like to know if it is easy to convert an existing Partnership Firm to a Limited Liability Partnership (LLP).

If yes, what are the stages involved?

Thanks!

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CA CS Chirag (Practicing CA) (834 Points)
Replied 23 January 2014

1.	Obtain designated partner identification number (DPIN) for the designated partners and DIN.
2.	The application for allotment of DPIN shall be made online in (E-Form 7)(Procedure for getting DPIN)
3.	The name with which LLP is to be incorporated is to be decided.
4.	The registrar will approve the name applied for provided the name is not either undesirable in the opinion of the Central Government or that is identical with or that which too nearly resembles to the name of any existing partnership firm or a LLP or a body corporate or a trade mark registered or pending registration under the Trade Marks Act, 1999.
5.	Application shall be made in (E-Form 1) for the availability of the proposed name with the Registrar
6.	Applicable fees has to be paid by of credit card.
7.	Application for conversion has to be made in (E-Form 17) with the following attachments : · Statement of partners of the firm (may be attached in a tabular form) · Incorporation Document & Statement in Form 2 filed electronically. · Statement of Assets and Liabilities of the firm duly certified as true and correct by the Chartered Accountant in practice. · List of all the creditors along with their consent to the conversion (may be given in the form of a tabular statement). · Approval of the governing council (In case of professional firms) · NOC from Income Tax authorities. · Approval from any other body/authority as may be required. · Particulars of pending proceedings from any court/Tribunal etc. · Rejection letter of Registrar of any earlier application for conversion. · Particulars of convictions, rulings, orders, judgement of Courts in favour or against the firm which are subsisting. · Other optional attachments as may be required.
8.	In case the registrar is satisfied that the application is in order and that it complies such regulations, procedures as may be applicable he will register the conversion.
9.	Registrar will issue the certificate of registration on conversion of the partnership firm into LLP in Form 19 of the LLP Rules & Forms 2008.
10.	On issue of certificate of registration the new LLP thus formed shall within 15 days from the date of registration inform the concerned Registrar of Firms with whom the erstwhile firm was registered under Indian Partnership act, 1932 about such conversion in Form 14 of the LLP Rules & Forms 2008.
11.	Form 14 must be accompanied by the following attachments : · Copy of Certificate of Incorporation of LLP formed. · Copy of incorporation document submitted in Form 2 (with the Registrar of Firms) · Other optional attachments as may be required.
12.	The limited liability partnership shall ensure that for a period of twelve months commencing not later than fourteen days after the date of registration, every official correspondence of the limited liability partnership bears the following : · a statement that it was, as from the date of registration, converted from a firm into a limited liability partnership; and · the name and registration number, if applicable, of the firm from which it was converted.
13.	Any limited liability partnership which contravenes the above mentioned provisions shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees and with a further fine which shall not be less than fifty rupees but which may extend to five hundred rupees for everyday after the first day after which the default continues.
NOTE In the event, Registrar has refused the registration, the applicant firm, may apply to the Tribunal within sixty days from the date of receipt of such intimation of refusal. On and from the date of registration of conversion of the erstwhile firm into LLP as specified in the certificate of incorporation · A LLP under the LLP Act, 2008 by the name specified in the said certificate comes into being. · All tangible as well intangible property vested in the firm, all assets, interests, rights, privileges, liabilities, obligations relating to the firm and the whole of the undertaking of the firm shall be transferred to and shall vest in the LLP without further assurance, act or deed. · The firm shall deem to be dissolved and if earlier registered under the Indian Partnership act, 1932 removed form the records mentioned in the Act. All proceedings by or against the firm which are pending in any Court or Tribunal or before any authority on the date of registration may be continued, completed and enforced by or against the limited liability partnership. Any conviction, ruling, order or judgment of any Court, Tribunal or other authority in favour of or against the firm may be enforced by or against the limited liability partnership. Every agreement to which the firm was a party immediately before the date of registration, whether or not of such nature that the rights and liabilities thereunder could be assigned, shall have effect as from that date as if— (a) the limited liability partnership were a party to such an agreement instead of the firm; and (b) for any reference to the firm, there were substituted in respect of anything to be done on or after the date of registration a reference to the limited liability partnership. All deeds, contracts, schemes, bonds, agreements, applications, instruments and arrangements subsisting immediately before the date of registration relating to the firm or to which the firm is a party, shall continue in force on and after that date as if they relate to the limited liability partnership and shall be enforceable by or against the limited liability partnership as if the limited liability partnership were named therein or were a party thereto instead of the firm. Every contract of employment to which paragraph 11 or paragraph 12 applies shall continue to be in force on or after the date of registration as if the limited liability partnership were the employer thereunder instead of the firm.