Converting a sole proprietorship to a Limited Liability Partnership (LLP) offers numerous advantages, including limited liability, better credibility, and structured business operations.
Start Conversion
Fill in the details to upgrade your business entity
Complete the form below to get expert consultation.
A strategic upgrade that provides legal protection, credibility, and scalability while preserving operational flexibility.
Converting a sole proprietorship into a Limited Liability Partnership (LLP) protects personal assets while enabling shared ownership, structured governance, and perpetual succession.
The conversion registers the business under the LLP Act, 2008 and transfers all assets, liabilities, and operations into a newly formed legal entity.
As businesses grow, LLPs offer a stronger foundation for credibility, funding, and long-term expansion.
LLPs are registered with MCA, increasing trust among clients, investors, and authorities.
Allows multiple partners, skill sharing, and collaborative growth.
Fewer regulatory requirements compared to private limited companies.
Preferred by consultants, IT firms, legal professionals, and startups.
LLPs attract banks, angel investors, and VCs more easily than proprietorships.
Choosing the right business structure is crucial. Below is a detailed comparison between Proprietorship and Limited Liability Partnership (LLP) based on key business factors.
| Factor | Proprietorship | LLP (Limited Liability Partnership) |
|---|---|---|
| Legal Status | Not a separate legal entity; the owner and business are the same. | Separate legal entity registered under the LLP Act, 2008. |
| Liability | Unlimited liability — personal assets are at risk. | Limited liability protects partners’ personal assets. |
| Compliance Requirements | Minimal compliance; GST registration only if applicable. | MCA registration, LLP agreement & annual filings (simpler than Pvt Ltd). |
| Taxation | Taxed as per individual income tax slab rates. | Flat 30% tax rate; no Dividend Distribution Tax (DDT). |
| Fundraising & Investment | Limited funding options; less preferred by banks & investors. | Easier access to bank loans, investors & venture capital. |
| Business Continuity | Ends with owner’s death or closure decision. | Perpetual succession even if partners change. |
| Ownership & Management | Owned and controlled by a single individual. | Managed by two or more partners as per LLP agreement. |
| Best Suited For | Freelancers, small traders & solo entrepreneurs. | Growing businesses, startups & professional firms. |
Ensure a smooth and legally compliant conversion with the following essential documents.
Identity & tax registration proof
Required for DSC & DIN
Utility bill / rent agreement
If premises is rented
Mandatory for MCA filings
For designated partners
Ownership & management structure
Financial position before conversion
Application for conversion
LLP incorporation form
LLP agreement submission
A structured process to convert a proprietorship business into a Limited Liability Partnership (LLP)
Designated partners must obtain a Digital Signature Certificate (DSC) and Director Identification Number (DIN) to file LLP forms with the MCA.
Apply for name reservation through RUN-LLP ensuring the proposed LLP name complies with MCA naming guidelines.
Prepare the LLP Agreement defining partner roles, capital contribution, profit-sharing ratio, and management rules.
Submit the FiLLiP form with partner details, registered office address, capital contribution, and supporting documents.
Upon verification, MCA issues the Certificate of Incorporation along with the LLP Identification Number (LLPIN).
Obtain new PAN and TAN for the LLP and update or apply for GST registration if applicable.
Close proprietorship accounts and transfer assets, liabilities, licenses, and operations to the newly formed LLP.
After converting a Proprietorship into an LLP, ongoing legal, tax, and operational compliance is essential to maintain good standing and avoid penalties.
LLPs must comply with MCA regulations by filing Form 8 (Statement of Accounts & Solvency) and Form 11 (Annual Return) annually. LLPs with turnover above ₹40 lakh or capital exceeding ₹25 lakh must undergo a statutory audit to remain compliant.
LLPs are taxed as separate legal entities and must file ITR-5 annually. Tax audits are mandatory if turnover exceeds ₹1 crore. GST-registered LLPs must file returns as per applicable frequency.
All bank accounts, contracts, licenses, and vendor agreements must be updated in the LLP’s name. Proprietorship accounts should be closed and stakeholders informed to ensure uninterrupted business operations.
Trusted expertise, transparent pricing, and complete compliance support
Our professionals guide you through name approval, documentation, and MCA compliance, ensuring a smooth and stress-free LLP registration journey.
From MCA filings to LLP agreements and statutory compliance, we handle everything accurately while keeping you informed at every step.
Enjoy transparent pricing with no hidden charges and round-the-clock assistance for queries, updates, and post-registration support.