Conversion

CONVERT A PARTNERSHIP INTO LLP

A Limited Liability Partnership is a advanced form of partnership than a regular partnership.

A Limited Liability Partnership (LLP) can prove to be a much better business vehicle than a regular partnership. Partners aren't disadvantaged by personal liability and the LLP does away with the excessive regulations of the Indian Partnership Act, 1932. Furthermore, there are tax benefits, no audit requirements below a certain capital, no cap with regard to number of partners or capital contribution requirements.

CONVERT A LLP INTO PRIVATE LIMITED COMPANY

Sadly before the introduction of Companies Act, 2013 conversion of LLP into a Company was not allowed as both the LLP, 2008 & the Companies Act, 1956 were not containing any enable provision for such conversions. However, it was the main obstacle to the implementation of LLP as an organizational form. Thus, with the introduction of Companies Act, 2013 this issue has been addressed up to some extent, which provides that any partnership firm, LLP, cooperative society, society or any other business organisation formed under any other law encompassing of 7 or more members, may at any time register under Companies Act, 2013 as an unlimited company, or as a company limited by shares, or a company limited by guarantee by following the procedure laid down in Companies (Authorized to Register) Rules, 2014.

Limited liability Partnership is the choice by the start-ups when they just need limited liability in the business & want to save the annual expense, audit expenses & incorporation charges. They don’t want to raise the funds from venture capital firms in the starting. Because there are many ways to raise money for the start-ups in India. Private Limited Company is selected over LLP by the startup when they want essential funding from an investor or already in process with the seed funding. Even on later stage these days start-up also offer shares to employees which is only possible in the case of Private limited company.

CONVERT A PARTNERSHIP TO PRIVATE LIMITED COMPANY

Corporatisation is the need of the hour. The entire world is gradually drifting towards one global market without any trade barriers between the countries. A small unincorporated organization led by few partners cannot think of growth on large scale without corporatizing itself. Corporatisation has its own advantages such as Limited Liability, Perpetual Succession, Transferability of shares, easy access to funds etc.