Limited Liability Partnership: 

Before starting with the conversion of Proprietorship to LLP, let us understand what is limited Liability partnership 

A limited Liability Partnership means a business where the minimum two members are required and there is no limit on the maximum number of members. The liability of the members of an LLP is limited. 

Prime reason why the concept of LLP has evolved is because of its simplicity in formation and easy maintenance. It helps owners also to limit their liabilities. This is the biggest advantage of an LLP over a traditional partnership firm. LLP has a blend of the benefits of a Company and a Partnership Firm namely, limited liability feature of a company and flexibility of a partnership firm. No partner is liable on account of unauthorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s misconduct. LLP form of organization is usually preferred by Professionals, Micro and Small businesses that are family owned or closely-held. 

  Conversion of Proprietorship firm to LLP: 

A sole proprietorship cannot be directly converted into a LLP as it has only one person. It can be either done by closing the proprietorship and registering an LLP from scratch or by including another person in the business and making him a partner and then converting it to an LLP. Either way it would be a new LLP Registration only. 

Minimum requirement to be fulfilled for conversion of Proprietorship to LLP: 

• A minimum of two Partners are required to start the LLP formation procedure 
• Two designated partners, one of whom must be an Indian Citizen residing in India 
• A registered office that is located in India 
• LLP agreement through which The mutual rights and duties of partners shall be governed between LLP and the partners. 

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