There is an automatic transfer of assets and liabilities from a proprietorship firm to a LLP.
Saving of stamp duty and capital gain tax, as no separate document is needed for transfer. Movable and immovable assets and liabilities pass off automatically to the LLP.
No effect on brand value and goodwill; as an LLP the firm would enjoy the same legal recognition too.
Carryover of accumulated losses and unabsorbed depreciation for a further 8 years by the successor LLP; the loss/depreciation is said to be the previous years before conversion.
The first step is the application for Digital Signature Certificate or DSC; it requires self attested proof of identity and address.
The next is the approval of the DPIN; important for the company's incorporation it requires first getting the provisional certificate. The certification or attestation of the Director's personal details is required before it is submitted to the MCA cell for approval.
The third step is the Pre-name Application Search; an online search has to be made to find out regarding availability of name and the promoters have to give a list of 6 minimum names in order of priority.
The fourth step is the actual application for name availability; the Main Object Clause stating the object of the LLP is to be drafted and submitted with the 6 names, Form 1 and Main Object Clause.
The next step is that of making representations to the Registrar of Companies on behalf of promoters; required changes have to be made as suggested by the Registrar of Companies.
The sixth step is the incorporation of an LLP; drafting of the LLP agreement before getting it vetted by the promoters and then being sent for printing and getting e-forms processed. It required Form 2; a statement by promoters, Form 4 & Form 9; a notice of consent and appointment of designated partners with their personal details, Form 3; the information regarding the LLP agreement, the duly stamped LLP agreement, the promoters signed subscription sheet and proof of address of the registered office of the company.
The last and final step is filing all the documents with the Registrar of Companies, following up and finally incorporating the changes as suggested by the Registrar of Companies; this requires online uploading of e-forms, payment of registration fees and then finally getting the Certificate Of Incorporation issued.