Convert Proprietorship to Limited Liability Partnership in
3 simple steps, you get
- Documents Review
- Expert Guidance
- DPIN
- PAN & TAN
- Digital Signature Certificate
- Name Reservation
- LLP Agreement
- Certificate of Incorporation
Let's incorporate your Limited Liability Partnership!
Introduction
Converting a proprietorship to a Limited Liability Partnership (LLP) marks a strategic shift in the business structure, offering entrepreneurs a more flexible and collaborative framework. While a proprietorship embodies simplicity and sole ownership, transitioning to an LLP introduces the concept of shared responsibility and limited liability. This evolution allows for a more dynamic and scalable business model, fostering collaboration among partners while providing a shield against personal liability.
In this transformation, the business gains the advantages of a separate legal entity, enhanced financial security, and a structure conducive to shared decision-making.
As Bright Accounts, we offer seamless assistance in converting your proprietorship to LLP. Our expert team guides you through the entire process, ensuring a smooth transition. From document preparation to filing and compliance, we handle every aspect to make the conversion hassle-free.
The whole process will be managed by a Certified Chartered Accountant and Company Secretary
Documents Checklist
We have compiled a detailed list of documents required to convert your Sole Proprietorship to Private Limited Company
Identity Proof
- Document Proof of Partners
- Notarized documents (For Foreign Nationals)
Other Documents
- Passport Sized Photograph
- NOC
Address Proof
- Utility Bill or Bank Statement
- Rental agreement if rented.
- Proof of ownership of a business place (if owned)
process
Conversion Process
in 3 Simple Steps
At Bright Accounts, we have simplified the entire conversion process of a converting Sole Proprietorship to Limited Liability Partnership into 3 simple steps. This makes your journey smooth, structured and easy.
- Pre-application
- We collect basic information
- Gather required documents
- Obtain Digital Signature Certificate
- Drafting & Application
- Drafting LLP Agreement
- Application DPIN
- Name Reservation
- Filing Form-2
- Apply for Incorporation of LLP
- Update PAN & TAN
- Approval
- Issuance of Certificate of Incorporation
- Update Bank Details
Upon successful review and compliance, the RoC issues the Certificate of Incorporation, officially recognizing the conversion of the sole proprietorship into an LLP.
benefits
What's Good
about a converting Proprietorship to Limited Liability Partnership
Separate Legal Entity
Much like a company, an LLP maintains a distinct legal identity. It operates independently of its partners. The registered LLP is treated as a separate person. Because of this contracts are executed under the LLP’s name creating trust among various stakeholders.
No Mandatory Capital Contribution
There is no minimum capital requirement to register a Limited Liability Partnership. The partners can decide to incorporate a Limited Liability Partnership with any amount of capital.
Limited Liabilty
In an LLP, partners benefit from limited liability. This implies that partners are responsible only for the amount they have invested. In the event of insolvency or winding up, partners need not settle debts from their personal assets, only the assets of the LLP are utilised to settle debts.
Flexible Partners Limit
In a Partnership Business, there is a maximum limit of the number of partners. However, in the case of LLP there is no ceiling limit on the number of partners. There must be at least 2 Designated Partners.
Cost-Effectiveness and Minimal Compliance
The cost of registration and incorporation of a Limited Liability Partnership is quite low in comparison to the cost of incorporating a public or private limited company. The compliance burden is also minimal, with the LLP required to file only two statements annually— the Annual Return and the Statement of Accounts and Solvency.
Transparent Governance
LLPs are subject to transparent governance practices. This includes the preparation of financial statements, filing of annual returns, and adherence to regulatory guidelines.
What do you get
when you work with Bright Accounts
Convert your Sole Proprietorship to Limited Liability Partnership
When you convert your Sole Proprietorship to Limited Liability Partnership with the help of Bright Accounts, you not only get the items mentioned on the side, you also get a friend who advices, guides and helps you grow into a great business.
- DPIN & DSC
- Name Reservation
- LLP Agreement
- Comany PAN and TAN
- Certificate of Incorporation
- Expert advice you can count on
- Our Bright support throughout the process
Why Bright Accounts
There are many reasons why clients choose Bright Accounts, but from our experience we have listed the four main reason why you should go with us.
Bright & Knowledgeable
Bright Accounts delivers high quality financial services by a team of bright and knowledgeable experts.
Always happy to help
Bright Accounts commit to provide dedicated support and assistance to our clients.
Professional & Approachable
We maintain a high level of professionalism while being easily approachable for our clients.
Easy & Quick
We focus on streamlining and simplifying the complex processes for our clients.
Prerequisites or Conditions
The following are conditions for Prerequisites for conversions of a Proprietorship to Limited Liability Partnership
- An LLP must have a minimum of two designated partners. The proprietor can be one of them.
- All partners must obtain Designated Partner Identification Numbers (DPIN) and Digital Signature Certificates (DSC).
- Draft an LLP agreement defining the roles, responsibilities, and profit-sharing arrangements among the partners.
- Propose and reserve a unique name for the LLP with the RoC.
- Comply with all legal formalities and timelines stipulated by the MCA during the conversion process.
- LLPs do not have a minimum capital requirement, making it more flexible compared to other business structures.
Frequently Asked Questions
Converting a Proprietorship into an LLP offers several advantages, including limited liability protection for partners, separate legal entity status, ease of transferability, perpetual succession, and tax benefits available to LLPs.
In general, most types of businesses can be converted from a Proprietorship to an LLP, subject to compliance with the applicable regulations and eligibility criteria. However, certain businesses may have specific restrictions or requirements based on their nature or industry sector.
After conversion, the LLP is required to comply with the regulatory obligations applicable to LLPs, including filing annual returns, maintaining proper accounts, conducting meetings, and adhering to tax laws and other statutory requirements
The conversion itself is not subject to tax implications. However, there may be tax implications arising from the change in business structure, such as capital gains tax on the transfer of assets or liabilities from the proprietorship to the LLP. It’s advisable to consult with a tax advisor to understand the specific tax implications.
The duration of the conversion process may vary depending on factors such as the completeness of documentation, approval timelines from the ROC, and other procedural requirements. In general, the process may take several weeks to complete from the date of filing the necessary documents with the ROC.
Yes, existing contracts and agreements entered into by the proprietorship can be transferred to the LLP after conversion, subject to the consent of the parties involved and compliance with contractual obligations. It’s essential to review existing contracts and agreements to ensure a smooth transition to the LLP structure.
Bought Together
There are many reasons why clients choose Bright Accounts, but from our experience we have listed the four main reason why you should go with us.
Limited Liability Partnership Annual Compliances
Navigate LLP annual compliance effortlessly with Bright Accounts. Our dedicated team ensures timely submission and adherence to rules.
Obtain your business license today
Ensure compliance with local regulations and establish your business's legal presence effortlessly. Let us handle the paperwork.
Outsource Accounting & Bookkeeping
Save valuable time, money and labor by outsourcing your accounting and bookkeeping tasks to Bright Accounts experts.