Partnerships and Limited Liability Partnerships are many times confused to be one and the same thing. However, the statement is not at all true. Limited liability partnerships can be considered as an advanced version of partnerships. Or better LLPs are a form, a type, a classification of the partnerships. The biggest difference we can draw out is by looking at the form of liabilities given to the partners and the shareholders in both forms of business. In a partnership, unlimited liability is given to the partners and the shareholders. However, in a limited liability partnership, as the name suggests, limited liability is given to the partners and the shareholders. Partnerships are, therefore, considered to be quite risky. It puts the personal assets of the shareholders and the partners at stake. LLPs, despite being a new concept in India, are gaining a lot of positive attention of the Entrepreneurs due to several reasons including the limited liability prospect as well as the no minimum share capital prospect. Entrepreneurs are now converting their firms and companies into LLPs. Discussed below is the partnership conversion into an LLP.
It is quite obvious as to why someone will want to convert his partnership into an LLP. However, partnership conversion is not that simple. Certain documents are required. A proper legal procedure has to be followed. Certain specified forms are to be filed also.
You will need to follow the following steps in order to proceed with the partnership conversion.
First of all, a DSC (Digital Signature Certificate) and DPIN (Designated Partner’s Identification number)/DIN(Director Identification Number) [To avoid duplicity, DPIN and DIN were integrated by MCA circular dated 8th July, 2011. Either DPIN/DIN can be used.] will be required. Both are very necessary to proceed with the conversion.
Then a name is selected. Name approval can be very difficult. There are certain things you need to keep in mind while going with the name selection. The name should be unique completely. It should not be offending in any way. Also, it should be easy to remember. The name should also end with Limited Liability Partnership or LLP. After the name selection, apply for the name approval. The approval of name is mandatory in order to proceed further. LLP Form 1 needs to be filled for name approval.
Next, file LLP Form 2 (Document of Incorporation and Subscriber’s Statement), LLP Form 3 (Information regarding LLP Agreement) and LLP Form 17 (Application for conversion is to be filled in Part-A and a Statement of the Partners in the format provided in Part-B), LLP Form 4 and LLP Form 9 (Notice of appointment of Partners, cessation, change in name/address/designation of a designated partner or partner and consent to become a partner / designated partner) with other specified documents.
These documents include-
Address proof of registered office,
Approval by regulatory authority,
Details of partnership (including details of partners and directors)
All these documents are finally submitted to the Registrar along with the prescribed fees. An online application can be also filed. Verification takes place. After the satisfaction of the registrar, a certificate is issued. The certificate indicates the successful conversion of your Partnership into a Limited Liability Partnership.
Also, the Registrar of Firms must be informed of the conversion in LLP Form 14 within 15 days of receiving the Certificate of Registration from the ROC.
The LLP must, in every official correspondence, for a period of 1 year, starting not later than 14 days from the date of registration:
(a) A statement that the firm was from the date of registration converted into an LLP.
(b) The name and registration number, if any, of the firm from which it converted into an LLP.
Partnership conversion may seem like an overwhelming process due to all the documents involved. However, we, at LegalRaasta can make this whole process a lot quicker and easy for you. All you need to do is fill in some basic details regarding yourself and your company registration.
No one can deny the fact that startups need recognition. Startups, being new to the market, need to tell people that they exist. Market primarily consists of potential customers, investors as well as partners. And these are vital for any business. Without marketing, you and your startup is nothing. No one knows you, so they won’t even bother to spare you a glance. Your idea may be unique and outstanding, but without marketing, that idea is completely useless. Being an entrepreneur, you need to know how to sell your products and services. To sell, people need to know about your existence. You need to attract them. To attract customers, you need marketing. Now, there are two primary forms of marketing. First is traditional marketing and the second being, digital marketing. How are you supposed to choose the best way? How are they going to help? The same is discussed below. Traditional marketing is nothing but the old ways of promoting a company. It can be done via posters and banners. ...
Getting acquired is one of the major moments of your life. It is a mix bag of feeling because your startup is like a baby that you nurtured from the start and now after selling it away, things will never be the same and you might not have the same freedom to run that business as you used to. The whole process itself is very tedious and involves a lot of aspects. Your legal advisor and countless manuals may furnish you with all the details however you might not have anyone who would guide you how to handle the people aspect related to you’re the whole process of acquisition. So let me help you now. There are a lot of people involved and you need to have cordial relation with almost all of them and have no grudge against any. During this delicate time, it is essential for you to maintain your calm and no matter how stressed you are from the inside, you must stay calm on the outside. And in this critical time, it is imperative for you to have soft skills and here are three important rela...
To pass the different stages of building a startup, you need not climb the treacherous mountains but pass through the valleys paved by others. Starting your own venture can be a quite daunting task. The can be like hurtling down a potholed road with the ups and downs and the unpredictability that takes extra efforts to overcome. It is good to heed the advice of the experienced people. It is always advised to take away from experiences of a person who has gone through the potholed road. To be an entrepreneur in competitive times like these can be a daunting and a demanding task. You need to give in all you have with zero complaints. The following are the best ways to get through the startup transition on day 1: 1. Keep your heart full, your mind clear and your body active You need to keep yourself well through the transition process. It’s good to take some time out for yourself. Do some physical activity, read in your free time and learn every time. You need to understand that...
You will need to follow the following steps in order to proceed with the partnership conversion.
Comments
Post a Comment