PROPRIETORSHIP FIRM TO LLP
Conversion of a proprietorship to LLP is the best way to reduce the risks involved in the business. When the business converts to an LLP, all the assets and liabilities are shared. Moreover, each partner in the firm has limited liabilities.
There are many associated benefits to this process. SunShine Corporate Solutions can handle all the legal documentation required for conversion of proprietorship firm and for LLP registrations. Key benefits :
A firm considers converting from a proprietorship to an LLP or a private limited for the following reasons:
• The assets and liabilities of the proprietorship are transferred to the new LLP. This means that all the risks are also shared by the partners.
• There is no need to pay stamp duty on the existing properties - movable and immovable - of the LLP. This is because duty has already been paid for these properties, and ownership does not change hands during conversion.
• During transfer of properties from a proprietorship to an LLP, there is no capital gain tax to be paid.
• After conversion of proprietorship to LLP, the new firm will already have an established brand. This brand along with all its trademarks and copyrights is transferred automatically during conversion.
• The accumulated loss or depreciation of the proprietorship is considered to be the loss or depreciation of the new LLP. This means that the loss is carried forward to the new firm, and it can be done for 8 years after the formation of LLP.
Although conversion of proprietorship firm is simpler to an LLP than to a private limited company or public limited company, it still required many steps to be followed. There should be minimum two designated Partners and at least one of them should be resident of India. All designated partners should obtain Director Identification Number and one of the designated partner should have Digital Signature Certificate.
SunShine Corporate Solutions helps businesses convert from one form to another in a seamless manner. We use our experience and legal resources to ensure that all the requirements for conversion are met in a proper manner.
We believe that as the owner of a proprietorship firm, your focus is best served on core operations. By outsourcing your legal work to SunShine Corporate Solutions, you can expedite the process of conversion, while still being able to function normally. Please contact us to devise a solution that is precisely tailored to the needs of your specific business.