Proprietorship to Limited Liability Partnership

A recent phenomenon as of late is that more and more companies have started to opt for Limited Liability Partnerships.

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    Proprietorship to LLP

    recent phenomenon as of late is that more and more companies have started to opt for Limited Liability Partnerships. LLP is the minimal personal liability bestowed on each of the partners. In general terms, the legal responsibility of each partner for the actions of another partner is limited to the assets of the partnership. partner can not lose more in most states than his or her investment for something another partner does.

    Procedure For Conversion of Sole Proprietor to Private Limited Company

    STEP 01

    Automatic transfer

    All the assets and liabilities of the firm immediately before the conversion become the assets and liabilities of the LLP.

    STEP 02

    No Stamp Duty

    All movable and immovable properties of the firm automatically vest in the LLP. No instrument of transfer is required to be executed and hence no stamp duty is required to be paid.

    STEP 03

    No Capital Gain Tax

    No Capital Gains tax shall be charged on transfer of property from firm to LLP.

    STEP 04

    Continuation of Brand Value

    The goodwill of the firm and its brand value is kept intact and continues to enjoy the previous success story with legal recognition.

    STEP 05

    Carry Forward and Set off Losses and Unabsorbed Depreciation

    The accumulated loss and unabsorbed depreciation of firm is deemed to be loss/ depreciation of the successor LLP for the previous year in which conversion was effected. Thus such loss can be carried for further eight years in the hands of the successor LLP

    Documents Required For Conversion of Sole Proprietorship to LLP

    • LLP Agreement
    • Form 2
      (Statement by Promoter)
    • Form 3
      (Information regarding the LLP Agreement)
    • Form 4 & Form 9
      (Notice of Consent & Appointment of Designated Partners with their personal details)
      • Subscription sheet signed by the promoters
      • Duly stamped LLP Agreement
      • Proof of Address of Registered Office

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