What is the procedure to convert an existing Partnership company to LLC ?

The LLP Bill provides that existing partnership firms, unlisted companies and private companies could convert themselves into Llps. The Registrar of Companies (RoC) is vested with the powers to administer Llps in all aspects of statutory requirements. The conversion to an Llp structure can take place by filing prescribed documentation/information with the RoC. For partnership firms proposing to convert into an Llp, it needs to file a statement by the partners in prescribed format, the name/registration of the firm, and incorporation document. Companies proposing to convert would require a statement from shareholders in prescribed format as well.

It is important to note that on conversion, all the partners/shareholders of the partnership firm/unlisted company/private company shall become the partners of the Llp. It is provided that no other person would become partner/shareholder on conversion into an Llp (i.e. at conversion, it should be a mirror image).

On conversion, all the tangible (movable and immovable) property and the intangible property, all assets, interest, rights, privileges, liabilities, obligations of the firm/company shall stand transferred to, and vest in, the Llp. Also, the firm/company so converted into an Llp shall cease to exist upon conversion.

Every partner of the partnership firm that is converted into an Llp shall continue to be personally liable (jointly and severally) for the liabilities and obligations of the partnership which were incurred prior to the conversion or which arose before the conversion. Such provisions are not applicable in the case of conversion of a company into an Llp, presumably since liability of shareholders in a company is anyway limited.

Consult an auditor for preparation of Memorandum and Articles of association and arranging registration of the company with Registrar of Companies.