Conversion Of Partnership Firm to Limited Liability Partnership
Partnership firms are converting themselves into Limited Liability Partnership, because it provides some amazing benefits like – limited liability protection, no maximum limits for the number of partners, easy to transfer ownership, etc. One of the major requirements for the conversion of Partnership into LLP is that the LLP formed from the Partnership have the same Partners as the original Partnership. The LLP formed cannot have new or less Partners than the Partnership firm. Therefore, if any Partners are to be added to the LLP, the Partnership should first be converted into a LLP and then Partners must be added to the newly formed LLP.
Requirements For Conversion Into LLP
i. Upto date filing of Income tax returns.
ii. Consent of all the unsecured creditors for the proposed conversion.
iii. Minimum 2 Designated Partners.
iv. Atleast 1 of the designated partners shall be an Indian Resident.
v. There is no concept of share capital, but there has to be some sort of contribution from each partner.
vi. The Partners and Designated Partners can be same person.
