A Limited Liability Partnership (LLP) offers a more flexible and secure business structure compared to a traditional partnership. Unlike partnerships, LLPs eliminate personal liability and aren’t bound by the restrictive provisions of the Indian Partnership Act, 1932.
LLPs provide added benefits such as tax advantages, no mandatory audits below a certain capital threshold, no limit on partners, and no minimum capital contribution.
Conditions for Conversion of Partnership Firm into LLP
As per Section 55 of the LLP Act, 2008 and Schedule II, a registered partnership firm can be converted into an LLP if the following conditions are met:
The partnership must be registered under the Indian Partnership Act, 1932.
All existing partners of the firm must become partners of the LLP—no new additions or exits allowed during conversion.
At least two partners must have DPINs, and all partners must hold valid DSCs before applying.
Consent from all partners is mandatory for conversion.
The LLP must have the same partners as the original partnership at the time of application.
After conversion, any partner may exit the LLP if they choose.
All Designated Partners must have a DIN or DPIN.
Key Differences Between a Partnership and an LLP
Separate Legal Entity Partnership: No. | LLP: Yes.
Liability Partnership: Unlimited. Personal assets of the partners are also liable. | LLP: Limited to the extent of their capital contribution.
Books of Accounts Partnership: Not mandatory. | LLP: Should be prepared according to the provisions of the LLP Act.
Number of Members Partnership: Maximum 20. In the case of a banking business, the maximum number is 10. | LLP: No limit on the maximum number of partners.
Digital Signature Certificate (DSC) Partnership: No such requirement. | LLP: All designated partners of the LLP should have a Digital Signature which is a prerequisite for e-filing.
Benefits of a Limited Liability Partnership (LLP)
1. Separate Legal Entity An LLP is legally distinct from its partners, meaning it can own property, sue, or be sued. It continues to exist even if partners leave—dissolution requires mutual consent.
2. Flexible Agreement Ownership in an LLP is easily transferable. New designated partners can be added quickly, making it flexible for structural changes.
3. Ideal for Small Businesses LLPs with capital below ₹25 lakhs and annual turnover under ₹40 lakhs are exempt from mandatory audits, reducing compliance costs—ideal for startups and small enterprises.
4. Property Ownership Being a juristic person, an LLP can hold property in its name. Individual partners cannot claim ownership of LLP assets.
5. No Owner-Manager Distinction In an LLP, partners both own and manage the business—unlike private limited companies, where shareholders and directors may differ. However, this structure is less preferred by venture capitalists.
Procedure for Conversion of Firm into LLP
Step 1: Obtain Digital Signature Certificate (DSC) All partners must have a valid DSC to sign e-forms during registration.
Step 2: Apply for Director Identification Number (DIN) At least two designated partners must obtain a DIN or DPIN to act as official partners in the LLP.
Step 3: Name Approval Apply for name reservation through the RUN-LLP form on the MCA portal, ensuring the name aligns with LLP naming guidelines.
Step 4: Incorporation of LLP Submit the incorporation form (FiLLiP) along with required documents to the Ministry of Corporate Affairs (MCA).
Step 5: File LLP Agreement Draft and file the LLP Agreement (Form 3) within 30 days of incorporation, outlining roles, rights, and responsibilities of all partners.
What is LLP Conversion Notice?
For 12 months after registration, starting within 14 days, an LLP must state in all official communications that it has converted from a partnership. It must also include the registration date, and the name and registration number of the former firm.
Non-compliance may attract a penalty between ₹10,000 and ₹1,00,000, with an additional fine of ₹50–₹500 per day for continued default.
LLP Form No. 17 – Firm to LLP Conversion Application
Part A: Application – Key Information
SRN of RUN Form (or proposed LLP name if not filed)
Firm’s name and address
Registration details under the Partnership Act, 1932 or other applicable laws
Date of firm formation agreement
Number of partners and their capital contribution
Confirmation that all firm partners are becoming LLP partners
Partner consent details
Income tax return details under the Income Tax Act, 1961
Information on any pending legal proceedings, prior refusals, or court orders
Disclosure of secured creditors and whether their consent is obtained
Any required government approvals for conversion
Part B: Statement – Declaration by Partners
Consent for conversion from all partners
Joint liability for pre-conversion obligations
Confirmation of compliance with LLP Act, 2008
Partner alignment, approvals, and creditor consent verified
Declaration that all details are true and accurate
Attachments Required
Statement of Assets & Liabilities certified by a Chartered Accountant
Partner consent statement
List of secured creditors with their consent
Latest Income Tax Return Acknowledgement
Relevant government approvals, if applicable
Any optional supporting documents
Filing & Certification
The e-form must be digitally signed by a designated partner (with DIN/DPIN)
It must be certified by a CA/CS/Cost Accountant
Form 14 must be filed with the Registrar to inform about conversion
Details required in Form 14 include:
Name and address of the firm
Firm registration info
LLP details and Certificate of Incorporation
Documents Required for Conversion of Partnership Firm into LLP
Documents from Partners
Scanned copy of PAN Card (or Passport for Foreign Nationals/NRIs)
Scanned Aadhaar / Voter ID / Passport / Driver’s License
Latest Bank Statement or Utility Bill (telephone, mobile, electricity, or gas)
Passport-sized photo
Specimen signature (blank document signed by the partner)
Note: One partner must self-attest the first three documents. For Foreign Nationals/NRIs, documents must be notarized (if in India or non-Commonwealth countries) or apostilled (if in Commonwealth countries).
Documents for Registered Office Address
Latest utility bill or bank statement (as address proof)
Notarised rent agreement (in English)
No-Objection Certificate (NOC) from property owner
Sale deed / property document (if the premises is owned)
Steps for Conversion of Partnership Firm into LLP
Obtain DSC and DIN Designated partners must secure a Digital Signature Certificate (DSC) and Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA).
Name Reservation Submit the RUN-LLP form to reserve a unique LLP name. The name must not be identical to any existing LLP or company.
Draft the LLP Agreement Create an LLP Agreement outlining business operations, partner roles, and profit-sharing. This agreement must comply with the LLP Act, 2008 and be signed by all partners.
File Form FiLLiP Submit Form FiLLiP to the MCA with details of the conversion, designated partners, and supporting documents.
File Form 3 Post-incorporation, file Form 3 with the Registrar of Companies (RoC), enclosing the LLP Agreement and other required documents to complete the conversion.
Partners' Liability Before Conversion
Before conversion, partners are jointly and severally liable for firm obligations. They may use personal assets to repay debts. After conversion, liability is limited to their capital contribution in the LLP, offering enhanced financial protection
Effect of Registration
The partnership is dissolved, and all assets and liabilities transfer to the LLP.
Business operations continue seamlessly under the LLP structure.
Existing partners become designated partners and must comply with the LLP Act.
The LLP becomes a separate legal entity with perpetual succession, unaffected by partner changes.
It is eligible for tax benefits like pass-through taxation.
The LLP assumes all ongoing legal cases involving the former firm.
All judgments or rulings—favourable or not—remain enforceable against the LLP.
Existing contracts and agreements remain valid with the LLP as a party.
Any powers of attorney or assignments granted to the firm are deemed transferred to the LLP.
Why Choose Sperso Filings for LLP Registration?
At Sperso Filings, converting your partnership firm into an LLP is fast, compliant, and hassle-free. Our team of legal experts ensures a smooth transition while staying updated with all Ministry of Corporate Affairs (MCA) guidelines.
What You Get with Sperso Filings:
Digital Signature Certificate (DSC) for one partner
Director Identification Number (DIN) for up to three partners
Drafting of the LLP Agreement
Government fees and stamp duty included
Issuance of the Certificate of Incorporation
Our Extended Support Includes:
Free expert consultation and follow-up sessions
Full support for opening a zero balance current account
Real-time updates and reminders for ROC compliance
1-year access to online accounting software
A complete master file with all incorporation documents
A dedicated service manager throughout the process
Assistance with new PAN & GST registration in the LLP’s name
FAQs on Conversion of Partnership Firm into LLP
The main steps include obtaining DSC & DIN, reserving a name, drafting the LLP Agreement, filing Form FiLLiP and Form 3, and completing ROC formalities.
Yes, only firms registered under the Indian Partnership Act, 1932 are eligible for conversion into LLPs.
Form 27 must be filed for registering a Foreign LLP with the Registrar in India.
Yes, LLPs must file Form 11 (Annual Return) and Form 8 (Statement of Accounts & Solvency) annually.
Designated partners are responsible for compliance and regulatory filings, while general partners only contribute to business operations.
The biggest advantage is limited liability protection—partners are not personally liable for business debts post-conversion.
The firm is dissolved, and all assets, liabilities, contracts, and legal proceedings are transferred to the newly formed LLP.
All existing partners of the firm must become partners of the LLP—no new or exiting partners are allowed during the conversion process.
The firm must be registered, and all partners must give consent to convert the partnership into an LLP.
Fees vary by state and capital contribution but generally include form filing charges, stamp duty, and professional certification costs.
Yes, partners can draw remuneration or salary as per terms outlined in the LLP Agreement, which must also comply with income tax rules.
Individuals declared insolvent, of unsound mind, or disqualified under the Companies Act cannot become partners.
There is no minimum turnover limit for forming or operating an LLP. However, audit is required if turnover exceeds ₹40 lakhs or capital exceeds ₹25 lakhs.