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Proprietorship to Limited Liability Partnership
Convert Your Proprietorship to LLP for Enhanced Benefits and Limited Liability
₹ 10000 only
Conversion of Proprietorship to partnership
The Limited Liability Partnership (LLP) in India was established under the LLP Act of 2008. The main idea behind introducing the LLP structure was to create an easily manageable framework that minimizes liability compared to sole proprietorships. LLP merges the benefits of both companies and partnership firms into one cohesive organization, offering a hybrid model. Consequently, converting a sole proprietorship to an LLP can be a wise business choice. In an LLP, partners are not liable for each other’s misconduct or negligence, providing limited liability protection against the partnership’s debts. This structure is particularly favored by professionals, as well as micro and small family-owned businesses.
Advantages of Converting from Proprietorship to LLP
Distinct Legal Existence
A Limited Liability Partnership (LLP) is recognized as a distinct legal entity, which sets it apart from a general partnership. This unique status allows the LLP to own assets, enter into contracts under its own name, and take legal action against third parties in the event of disputes.
Flexibility in Operations
The operation and management of an LLP are governed by the LLP agreement, allowing partners to determine how the business will run and to allocate roles and responsibilities as they see fit. This structure offers a high degree of flexibility, enabling partners to establish their own management guidelines, which is not typically available in other types of business entities.
Limited Liability for Owners
In a Limited Liability Partnership (LLP), partners' liability is restricted to the amount of capital they have contributed as outlined in the LLP Agreement. This means that partners are not personally accountable for the LLP's debts or losses, even during its dissolution. Additionally, one partner is not liable for the negligent actions or misconduct of another partner.
Reduced Compliance Requirements
In comparison to a Private Company, an LLP has fewer compliance obligations, particularly concerning audits. A statutory audit is only necessary when the LLP surpasses specific thresholds for turnover or capital contribution. Additionally, requirements such as partner meetings and operational resolutions are more relaxed and not obligatory in all situations.
Complete Registration Form
Provide us required documents
Make an online payment
Our expert team will manage the conversion of proprietorship to LLP
The certificate of incorporation will be mailed after completion of registration
How to Convert of Proprietorship to LLP with Corporate Shastra
Documents Needed for Conversion to LLP
PAN Card: All partners must provide their PAN cards. Foreign nationals can submit their passport instead.
Address Proof for Partners: Acceptable documents include Aadhaar Card, Voter ID, Passport, or Driving License for each partner.
Photograph: A recent passport-sized photo of all partners is required.
Business Address Proof: Submit a utility bill, such as an electricity or telephone bill, for the registered office address.
NOC from Owner: A No Objection Certificate must be obtained from the owner of the registered office.
Rent Agreement: If applicable, include the rent agreement for the registered office.
NRI/Foreign National: For NRIs or foreign nationals, the partner’s documents must be notarized or apostilled
Explore Conversion of Proprietorship to LLP in India
What are the key requirements/factors for registering an LLP?
Like all partnerships registration requires two or more individuals to be the designated partners, one partner being an Indian national. The registered place of business has to be in India.
Are there any limitations on being a partner when converting sole proprietorship to LLP?
Do I need to apply for a fresh registration in the name of LLP or amend the registrations in the name of Proprietorship Firm?
Comparison of Business Structures
Proprietorship | Partnership | OPC | LLP | Private Limited | |
|---|---|---|---|---|---|
Ownership | Sole Ownership | Min 2 partners Max 50 partners | Only 1 member | Min 2 Designated Partners | Min 2 Directors Min 2 Shareholders Max 15 Directors Max 200 Shareholders |
Separate
Legal Entity | No | No | Yes | Yes | Yes |
Applicable Law | No specified Act | Partnership Act, 1932 | Companies Act, 2013 | Limited Liability Partnership Act, 2008 | Companies Act, 2013 |
Statutory Audit | Not Mandatory | Not Mandatory | Mandatory | Based On Applicability | Mandatory |
Liability | Unlimited | Unlimited | Limited | Limited | Limited |
Perpetual Existence | No | No | Yes | Yes | Yes |
Ownership Transferability | No | Yes (Restricted) | Yes (Restricted) | Yes | Yes |
Taxability | Low | High | Moderate | High | Moderate |
Compliance
Requirement | Low | Low | High | Moderate | High |