Here you will find the complete process for Conversion of Sole Proprietorship to Limited Liability Partnership LLP in India including process, eligibility criteria, documents required and other relevant details.
In the year 2008, Limited Liability Partnership in India was first introduced with the LLP Act. The main motive to adopt Limited Liability Partnership in India has been to introduce an easy to maintain structure that reduces the liability as compared to a sole proprietorship structure where all the liabilities lie on the shoulder of one person. In case of an LLP, you can get the advantages of both the Private Limited Company and Partnership firm in a single structure of organization and it also offers a hybrid structure.
Under a Limited Liability Partnership, any one particular partner is not responsible or liable for another partner’s mistakes or negligence. This structure ensures the personal assets of the partners get limited liability protection especially from the debts of the LLP.
A Limited Liability Partnership is a very convenient type of Partnership business structure and has been widely preferred by a group of professionals, and even family oriented Micro and Small businesses. You can convert your Sole Proprietorship to a Limited Liability Proprietorship LLP with Seedup.in
Reasons why you should convert Sole Proprietorship to Limited Liability Partnership LLP in India
- LLP is an independent legal entity – Unlike a general partnership firm, LLP exists as a separate legal entity independent of its partners. This means that the LLP can have its own assets and liabilities too and in case of a dispute, it can also sue a third party.
- Limited Liability of the Partners – The Limited Liability of Partners means that their contribution in the partnership is limited to their capital contribution while the losses suffered cannot be assigned to the partners. Moreover, one partner is not accountable for the negligence of another in any way.
- Increased operational flexibility – Since the partners decide on the terms of responsibilities and shares, the structure of the business remains quite flexible and management becomes easier as the partners have free hand to create their own rules. All of this is mentioned in the LLP Agreement.
- Compliance issues are minimum – The compliance requirements are quite relaxed in case of LLPs as compared to a Private Limited Company. Even the requirement of statutory audit is mandatory only after a certain level of turnout.
Eligibility criteria for conversion of Sole Proprietorship to Limited Liability Partnership LLP in India
There should be two or more individuals coming forward for the partnership, and at least one of the two have to be a resident Indian citizen.
The registered place of business/office should be located in India.
Documents required for conversion of Sole Proprietorship to Limited Liability Partnership LLP in India
- PAN Card of all the partners.
- Passport (in case of foreign national partners)
- Aadhar Card/ Passport/ Voter ID of all the partners.
- Latest Passport size photographs of all the partners.
- Electricity/Water Bill of the registered place of business.
- NOC of the office space’s owner (in case of rented property).
- Rent Agreement of the office space (in case of rented property).
*Please note that in case of foreign nationals as partners, or NRIs, all the above mentioned documents should be either notarized or apostilled.
Procedure for Conversion of Sole Proprietorship to Limited Liability Partnership LLP in India with Seedup.in
- Fill the forms – The foremost step requires you to fill out some questionnaires and submit the required documents with consultation from our experts.
- Application for DSC and DPIN – The next step is applying for the Digital Signature Certificate and the DPIN for all the partners.
- Application for Reservation of Name – The next essential step is searching for a suitable name, checking if it is available or not and applying for the name reservation of the LLP.
- Drafting and Filing the Incorporation Document – After carefully drafting the incorporation document, we will file for the conversion of the sole Proprietorship to LLP. You will then receive the Certificate of Incorporation.
- Application for PAN and TAN – Once the Certificate of Incorporation is received, the next step is to apply for the PAN and TAN for the LLP.
- Drafting and filing the LLP Agreement – The final step for conversion is putting down the terms and clauses of operation and ownership into the draft of the LLP Agreement and filing it with the Ministry of Corporate Affairs.
This entire procedure may take upto 21 working days with our assistance.