A partnership firm is referred to as one Person Company or sole proprietorship, India offers you wide choices once it involves business. As an associate businessperson, you have got the selection to pick between these types of business. However, before selecting you would like to understand the professionals and cons of these forms. You would like to examine that type that can profit you and your business the foremost. All of those forms have different necessities, totally different blessings, and drawbacks. Talking regarding Partnership, one every of the most important advantages of this way is that the limited liability it provides to its partners.
Advantages of Conversion of Partnership Firm To Llp
LLPs are taxed with the general partnership firms. LLP pays an effective tax of 30.9%. They are exempted from a 10% surcharge. LLPs tax payment is less than other companies, which pay a 33.99% tax profits
The tax will be imposed only on 40% of LLP's income since the firm will be allowed to pay the balance 60% to the partners as remuneration. This means the partners will have to pay the amount paid to them.
The audit is not required unless capital exceeding Its 25 lakh or turnover exceeding Ra 40 lakh. Uke Companies, no requirement for payment of Corporation Tax a distribution of income among partners and there is no requirement as to Maximum Alternate Tax
All the assets and liabilities of the partnership immediately became the assets and liabilities of the LLP & No Stamp Duty is required. All movable and immovable properties of the fits automatically in the LLP and hence no stamp duty is required to be paid
No Capital Game tax shall be charged on transfer of property from firm to LLP.
Basic documents necessary for conversion of partnership firm into private limited company
Shareholders, partners, directors must have their pan cards. In case of foreigners, they must provide a passport.
Shareholders and directors of any partnership firm can submit their recent bank account statement (copy of the recent partnership page of Bank account passbook) or electricity bill or telephone bill registered to their name as address proof.
self attested any ID proof like driving license, voter ID, pan card or passport of Shareholders and directors need to be shown.
Recent passport size colour photos of both the directors and Shareholders are necessary.
Telephone bill or electricity bill of the office has to be submitted.
Recent income tax return filed Copies of the partnership firm are must.
self attested Copies of partnership deed must be provided by Shareholders, partners and directors.
Before converting into LLP the partnership firm should be registered under the Indian Partnership Act 1932. It is mandatory to register the firm into the Indian partnership act if the firm is not registered then the name of the statute under which it is registered should be mention at the time of conversion.
The partners of the firm should compulsorily have digital signature because only through digital signature many forms are filled. So partner should already hold a digital signature.
The partners who have already registered in the partnership firm do not hold any digital identification. DIN is referred to as a unique number issued by the ministry. DIN number is given to an individual only one and he or she can use it throughout his life without any compliance.
An individual can apply for the name of LLP through the ministry of corporate Affairs. The reservation for the name of Limited Liability Partnership should be there with you before filing the forms for conversion of partnership firm into LLP.
FILLP is the form that should be filled form for Incorporation of a Limited Liability Partnership. Also in this form, we can fill DIN for 2 partners.
It contains the Application and a Statement letter of the Conversion of Partnership Firm into LLP (Limited Liability Partnership). Form17 basically includes a Declaration by a Partner of the Partnership Firm. And should be Digitally Signed by a Partner and Certified by a Company secretary in whole time practice or Chartered accountant in whole time practice.
