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How to Convert into LLP

How to Convert into LLP

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Published by Corpro
Procedure of conversion of existing business into LLP
Procedure of conversion of existing business into LLP

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Published by: Corpro on Jun 01, 2009
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06/16/2009

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How to Convert into LLPPrepared by:www.llponline.in (Indian LLP Encyclopedia)
LLP Conversion ProcedureStep 1: Deciding the Partners and Designated Partners
Private Company desires to convert its status to LLP Form shall foremost decide the designated Partnersof the proposed LLP, as only the members can be the Partners of the converted LLP and of thesemembers of the company at least two Partners would be the Designated Partners.. In case of Body
 
Corporate who was the member of the Company, desires to act as designated partner of LLP, in that casetheir nominee can be appointed as the designated Partners.
Parameters for deciding Designated Partners:
1.Minimum of Two Individuals as Designated Partners, of total no. of Partners.2.Atleast One Designated Partner to be Resident Indian.In case of conversion of Private Limited Company into LLP, all the shareholders of the Company to bepartners in the LLP and no one else and also there will be no security interest subsisting or in force at thetime of application in the assets of the Company.
Step II: Obtaining DPIN and Digital Signature:
Section 7 (6) of LLP Act 2008, provides that every Designated Partner to obtain a DPIN from the CentralGovernment.Every Designated Partner requires Digital Signature for being registered as Business user. Thesignatures shall also be required for signing and filing of all relevant forms and documents to be filed,annually or event based after incorporation of the LLP, asking for approvals or as intimation.
Step III: Checking the Name Availability for LLP
The next step is to make an application in
eForm 1
of Rule 18(5) of the Limited Liability Partnership Act2008, for reservation of the desired name of the LLP on payment of the prescribed fees.A Board resolution passed by the Company approving the conversion into LLP shall be attached with theaforesaid form.
Step IV: Drafting of LLP Agreement
The next pertinent step is drafting of Limited Liability Partnership Agreement governing the mutual rightsand duties among the partners and among the LLP and its partners containing the basic content inrespect of Name of LLP, Name of Partners & Designated Partners , Form of contribution , Profit Sharingratio , Rights & Duties of Partners , Proposed Business , Rules for governing the LLP.In case no agreement is entered into, the rights & duties as prescribed under Schedule I to the LLP Actshall be applicable
Step V: Filing of Incorporation Document
Next is the filing of Incorporation documents (e Form 2), consent of Partners (e Form 4), LLP Agreement(e Form 3) and declaration electronically through the medium of e-forms prescribed with the Registrar of 

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