Partnership Firm to LLP Conversion

Partnership Firm to LLP Conversion: What It Means

Section 55 of the LLP Act 2008 and the Second Schedule to that Act govern the conversion of a registered partnership firm into an LLP. The conversion is a statutory continuation, not a fresh incorporation. All assets, liabilities, agreements and pending contracts of the partnership firm automatically vest in the new LLP from the date of conversion. The partners of the firm become Designated Partners of the LLP. This is the cleanest conversion route in Indian company law because no separate transfer agreement is needed.

Why Founders Pick This Conversion Path

Partnership firms operate under unlimited personal liability for every partner. As the business scales, that liability exposure starts to weigh on partners with significant personal assets. Partnership to LLP conversion gives partners the protection of limited liability while keeping the operational flexibility they are used to. The LLP also opens cleaner paths to bringing in new partners through capital contribution and to converting further into a private limited company later when funding becomes a possibility.

Eligibility Criteria for This Conversion

• The partnership firm must be registered under the Indian Partnership Act 1932
• All partners of the firm must become partners of the new LLP
• At the date of application, the partners are the same individuals as the partners on the date of registration
• Consent of all partners is required for the conversion
• No proceedings should be pending against any partner under the Indian Partnership Act

Documents Required for the Conversion

Step by Step Conversion Process

1. Partner Consent and ResolutionAll partners pass a resolution agreeing to the conversion. The resolution records the conversion date, the partner contributions to the LLP and the names of Designated Partners.
2. Reserve Name Through RUN LLPThe proposed LLP name is reserved through RUN LLP. Approval typically arrives in one to two working days.
3. File FiLLiP With Form 17FiLLiP is the incorporation form for the new LLP. Form 17 is filed alongside, declaring the conversion from a registered partnership firm under section 55.
4. Newspaper PublicationA notice of intention to convert is published in two newspapers, one English and one vernacular, allowing creditors to object within twenty one days.
5. Certificate of Conversion and IncorporationThe Registrar issues the Certificate of Conversion and the LLP is incorporated with a fresh LLPIN, PAN and TAN. All assets, contracts and liabilities vest in the LLP automatically.
6. Notify Authorities and Update RegistrationsWithin fifteen days of conversion, the LLP must notify the Registrar of Firms of the conversion. GST, MSME Udyam, IEC, FSSAI and Shop Act are updated.

Government and Professional Fees for the Conversion

Three cost components. ROC government fee for LLP incorporation is calculated on capital contribution. State stamp duty on the LLP agreement varies by state. Our professional fee covers the FiLLiP and Form 17 filing, drafting of the LLP agreement, partner resolutions, newspaper publication coordination and post conversion handover. Request a callback for an itemised view of partnership to LLP conversion fees applicable to your state.

Frequently Asked Questions