After launch of LLP Act in 2008, many Partnership Firms have begin to convert their Partnership Firm to LLP. The reasons of conversion are self-evident such as capacity to take unlimited number of partners, separate legal entity, limited liability and ease of ownership transfer. Because of these advantages of LLP over Partnership, LLP has become very favourable amongst small and medium sized businesses.
The Partnership Firm which wants to convert itself to LLP must be registered under Indian Partnership Act, 1932. Unregistered Partnership Firm can’t be converted to LLP. LLP incorporated by conversion of Partnership Firm to LLP must have same partners as they were in the Partnership Firm. Therefore it is advised that the Partnership Firm should retire all the Partners who do not want to be a part of LLP and if new partners are to be added, they should be added after the incorporation of LLP.