Convert Proprietorship to LLP

Why Convert to LLP from Proprietorship?

Limited Liability Partnership (LLP) is an easy to maintain business structure compared to Proprietorship. The main advantage of converting from proprietorship to LLP is that the proprietor will get partners to share the responsibilities and financials hence helps the business to reach new milestones. A LLP structure of business associates the benefits of both of the Partnership and Company. Conversion from Proprietorship to LLP will be a wise decision. As per LLP act, 2008 – one partner is not responsible or liable for another partner’s misconduct or negligence. Being an entity with separate legal existence, personal assets of partners of LLP are protected from debts of the firm to the extent of the capital share subscribed. With all these reasons, LLP is the most preferred business structure by professionals, Micro and Small businesses that are family owned or closely-held.

₹ 887 All Inclusive

Benefits of LLP compared to Proprietorship

Separate Legal Existence

A Limited Liability Partnership (LLP) has a separate legal identity than of its partners and it is governed by the LLP act 2008. As LLP is a separate legal entity, it can take legal actions, own assets and borrow funds in its name itself where as a partnership firm can’t do the above in its own identity. A proprietorship has the identity of the proprietor and hence limited business opportunities.

Limited Liability of Partners

In a Limited Liability Partnership, the liability of the partners is extent to the capital contribution subscribed. Personal assets of the partners of a LLP are protected in case of loss or debt or even while the dissolution of LLP. A partner of the LLP is not held responsible for the actions of negligence or misconduct of any other partner.

Flexibility of Operation

A Limited Liability Partnership firm is managed and run according to LLP agreement, with which the partners decide the functions of business, subscription of capital share, division of profit share, division of duties and responsibilities. LLP is a very flexible structure and the partners are free to create their own rules of management which is not possible in other business structures.

Lesser Compliance Requirement

A LLP requires lower compliances compared to a Private Limited Company. Audit report is not mandatory for LLPs until it reaches certain level of turnover. Company compliances like board meeting, statutory meeting etc. do not applicable for LLP. Professional service charges are cheaper to maintain compliances for a LLP over a Private Limited Company.

Convert Proprietorship to LLP Online

Documents Required to Convert Proprietorship to LLP

PAN Card PAN Card of all Partners
Passport Passport is necessary in case of any foreign nationals
Address Proof Aadhaar/ Voter ID/ Passport/ Driving License of all partners
Photograph Latest passport size photograph of all partners
Business Address Proof Electricity Bill/ Telephone Bill of the office address
No Objection Certificate NOC from the Owner of Office Buliding (If the proposed registered office premises is rented)
Rental Agreement Rental agreement of the registered office if the office is rented
Notarization If any partner of the LLP is a foreign citizen, documents of that partner should be notarized or apostilled.

LLP Name Structure

Build a Unique Identity

Identification plays an important role in making a business outstand in competitive market, build unique and distinctive name for your business hence enhance your brand’s trust and value. Consumers should identify activity of your business from the brand name so that they can relate your business with its offerings.

Even though it meets all the above criteria, once again make sure that the brand name to be short, easy to remember and simple to pronounce or spell.

Mention Constitution Type on Your Brand Name

The name of a registered Limited Liability Partnership must end with LLP or Limited Liability Partnership as suffix. (Example: ABC CONSTRUCTIONS LLP)

Register Online

Convert Proprietorship to LLP in 3 Easy Steps

Fill up the Registration Form
Select any Package suits your requirements
Fill up the form which will take less than 10 minutes
Make payment through secured payment gateway.
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Provide details & upload documents required for LLP registration
Procurement of Digital Signature Certificates
Application for name reservation
Document drafting including LLP Agreement
Filing of online application
Certificate of Incorporation
Application for PAN and TAN
Your LLP is registered
All it takes 15 – 20 Working Days*
*Subjected to Government Processing Time

The Process of Convert Proprietorship to LLP

Day 1 – 2
Collection of Basic Information
Collection of required documents (scanned copies)
Application for Digital Signature Certificate
Day 3 – 4
Checking LLP Name availability
Application for LLP name reservation under “LLP-RUN”
Reservation of LLP Name
Day 5 – 10
Drafting LLP incorporation document
Review and Confirmation form Partners
Filing application for LLP Registration
Application for DIN allotment for Designated Partners
Certificate of LLP Incorporation
Day 11 – 13
Application for PAN and TAN of LLP
Drafting LLP Agreement
Review and confirmation from Partners
Day 14 – 20
Payment of Stamp Duty
Filing of LLP Application
Certificate of Incorporation
*Government process time may be change due to any circumstance. We hold no responsibility in such delay if in case any.

Enquiry

FAQ

What are the minimum requirements for registering a LLP in India?

There should me minimum 2 individual to be appointed as ‘Designated Partners’ out of which one should be Citizen and Resident of India. Also it requires having a registered address in India so that you should have a space to be register as a registered office.

Is there any minimum capital requirement for registering a LLP?

No. There is no minimum amount of capital requirement as per the law and partners can rise any amount of capital that the business demands.

What are the requirements to be a partner/Designated partner for a LLP in India?

As the LLP act 2008 allows Foreign Nationals, Foreign Companies or LLPs to incorporate an LLP in India, there is no limitation in terms of nationality or residential status for being a partner in a LLP in India, but it is mandatory that the LLP in India should at least have a Indian citizen who is the permanent resident of India as a Designated Partner. The partner or Designated Partner should be of age 18 or more to make sure he/she is competent enough to enter in to a contract.

How can we reserve a name for Limited Liability Partnership?

The name of a LLP is reserved through a web based application ‘LLP-RUN’ (Reserve Unique Name), the name availability is an essential part of Limited Liability Partnership registration in India. The partners can give maximum two names in preferential order to reserve any one. If both the names won’t meet the criteria of uniqueness, relevancy or does not fulfill the necessary requirements, the registrar may ask to re-submit the application with different name.

What is Director Identification Number (DIN)? Is DPIN (Designated Partner Identification Number) is required for LLP registration?

The concept of DPIN (Designated Partner Identification Number) is replaced by DIN (Director Identification Number) with respect to LLP registration in India. DIN is a unique number assigned by Ministry of Corporate Affairs to partners of the LLP. This allows any individuals to be director in any company or Designated Partner in LLP. The application of DIN allotment is made with the application of registration of LLP.

What is the Digital Signature Certificate? Who shall procure DSC for LLP Registration?

Digital Signature Certificate for LLP is provided in the form of a token and issued by Certified Authorities. Any form filed for incorporation of Limited Liability Partnership (LLP) in India online should be submitted after affixing Digital Signature of Designated Partner.

Whether place of office is required to register a LLP in India?

Yes. As Limited Liability Partnership is a Legal Entity of its own Identity, it should have a registered office. The registered office address can be either of a residential building or a commercial building. In most cases, the address is used for the communication purpose by the Ministry of Corporate Affairs or any other concerned authorities.

What is LLP Agreement? Does it needed to be registered with Ministry of Corporate Affairs?

Limited Liability Partnership agreement is an agreement executed by all the partners of a LLP after LLP incorporation in India. The agreement prescribes all the clauses related to the business including the rights, role, duties and responsibility of partners in LLP. The agreement must be filed with Ministry of Corporate Affairs within 30 days of the issue of Certificate of Incorporation of LLP. Failure to do so will charge an additional fee of 100 per day till the date of filing.

Can a LLP carry on more than one business activity?

Yes. A Limited Liability Partnership registered in India can carry on more than one business subjected to its relevancy. The activities must be related or in the same field itself. Unrelated activities such as Trading and Legal Consultancy cannot be carried out under the same LLP. The business activities must be mentioned in the agreement and to be approved from Registrar of Firms (RoF).

Whether LLP can be registered for Non Profitable business?

No. One of the essential requirements of setting up a LLP is ‘carrying on a lawful business with a view to profit’. There for LLP cannot be incorporated for undertaking ‘Not for Profit’ activities.