Step 1: Finalize Two Directors & Obtain DSC

A private limited company requires minimum two directors.

Steps:

• Obtain Digital Signature Certificate (DSC) for proposed directors
• Apply for DIN (Director Identification Number) via SPICe+ form

The proprietor may continue as one of the directors.

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Step 2: Choose Name & Apply for Approval

Name approval is done via SPICe+ Part A.

Guidelines:

• Must include “Private Limited”
• Should reflect business continuity
• Avoid trademark conflicts

SavingMantra Tip: Keep the proprietorship name similar to the new company (optional but recommended for brand continuity).

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Step 3: Draft MOA & AOA with Conversion Clause

The Memorandum of Association (MOA) should include:

• A clause stating that the new company is taking over the existing proprietorship business.

The Articles of Association (AOA) must define company rules and management structure.

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Step 4: File Incorporation Forms (SPICe+ Part B)

To register the new private limited company, file the following on MCA:

✔ SPICe+ Form
✔ MOA (INC-33)
✔ AOA (INC-34)
✔ AGILE-PRO (for GST, EPFO, ESIC registration)
✔ Proof of directors
✔ Proof of registered office

Once approved, the MCA issues the Certificate of Incorporation (COI).

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Step 5: Execute Business Transfer Agreement (BTA) / Slump Sale Agreement

This is the most crucial step of conversion.

The newly formed company must enter into a Business Transfer Agreement with the proprietor outlining:

• Transfer of assets & liabilities
• Transfer of contracts, licenses, GST, employees
• Consideration for transfer
• Effective conversion date

This ensures legal continuity of the business.

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Step 6: Issue Shares to Proprietor

In return for the transfer of business, the new company issues shares to the proprietor.

Two options:

1. Issue shares equal to the value of the business
2. Issue shares + cash consideration

This creates a legal link between the old and new business structures.

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Step 7: Update Registrations & Licenses

After incorporation, update the following:

✔ GST migration to new company
✔ Shop & Establishment registration
✔ Professional tax registration
✔ MSME / UDYAM registration
✔ FSSAI / Trade licenses (if applicable)

SavingMantra Tip: Apply for GST Amendment within 30 days to avoid penalties.

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Step 8: Inform Banks & Open New Current Account

A new company bank account must be opened.

Steps:

• Share COI, MOA, AOA
• Board Resolution
• PAN of the company

Transfer funds, close old accounts or keep them for settlement purposes.

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Step 9: Transfer Assets, Employees & Contracts to the Company

The following must be transferred formally:

• Inventory
• Machinery
• Trademarks
• Employees
• Vendor contracts
• Client agreements

A handover statement should be prepared for records.

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Step 10: File Post-Incorporation Compliance Forms

Depending on the business structure:

• First board meeting
• Appointment of auditor (ADT-1)
• Share certificates
• Register of members
• Statutory books
• PAN/TAN activation

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Documents Required for Conversion

From Proprietorship

• GST certificate
• Shop Act license
• Bank statements
• Asset list
• Liabilities list

For Company Incorporation

• PAN, Aadhaar of directors
• Address proof
• Photographs
• Office address proof
• NOC from property owner

For Takeover

• Business Transfer Agreement
• Asset valuation report
• Capital account details

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Compliance Checklist After Conversion

✔ New company PAN & bank account
✔ GST migration
✔ Transfer of employees (if any)
✔ Contracts migrated
✔ Share certificates issued
✔ Statutory registers updated

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Common Mistakes to Avoid

❌ Not drafting a proper BTA/Slump Sale Agreement
❌ Missing GST transfer timeline
❌ Not issuing shares to proprietor
❌ Operating both entities simultaneously (leads to tax confusion)
❌ Incorrect valuation of assets

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Benefits of Converting Proprietorship to Private Limited

✔ Limited liability protection
✔ Easier loans & funding
✔ Better tax planning
✔ Professional image
✔ Perpetual succession
✔ Scalable operations

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Conclusion

Converting a proprietorship into a private limited company provides tremendous growth opportunities and long-term business stability.
However, it requires careful planning, documentation, and compliance steps to ensure a smooth transition.

SavingMantra can help you with:

✔ Company incorporation
✔ Business transfer agreements
✔ Tax & GST migration
✔ End-to-end conversion compliance

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

Step 1: Determine Your Residential Status

Your taxability depends primarily on your residential status for the financial year.
In India, residency is classified as:

• Resident & Ordinary Resident (ROR) – Global income is taxable in India
• Resident but Not Ordinary Resident (RNOR) – Only India-source income + income from certain foreign businesses controlled from India
• Non-Resident (NRI) – Only income earned or received in India is taxable

Why this matters:
The first step helps decide which portions of income from domestic and foreign sources will be taxed.

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Step 2: Identify and Classify Foreign Income

Next, classify the type of foreign income you receive. Common categories include:

• Salary earned abroad
• Foreign business or profession income
• Investment income (interest, dividends, capital gains)
• Income from property held abroad
• Remittances received in India
• Income from foreign subsidiaries or branches

Proper classification enables correct tax treatment and reporting.

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Step 3: Determine Source of Income and Applicable Country Tax Laws

Every country has its own tax laws based on:

• Source-based taxation – tax based on location where income arises
• Residence-based taxation – tax based on the taxpayer’s residency

For individuals or companies operating globally, it is essential to check:

• If the foreign country taxes that income
• Applicable withholding taxes
• Local tax rates
• Compliance requirements (VAT, GST, payroll taxes, etc.)

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Step 4: Check Applicability of DTAA (Double Taxation Avoidance Agreement)

DTAA is a treaty between India and many countries to ensure you do not pay tax twice on the same income.

Through DTAA, taxpayers get:

• Tax credit method – Pay tax in one country and claim credit in another
• Exemption method – Income taxed in one country is exempt in the other
• Reduced TDS rates – Lower withholding tax on dividends, interest, royalties, etc.

Before calculating tax, check if India has a DTAA with the country of income origin.

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Step 5: Convert Foreign Income into Indian Currency

For tax filing in India, all foreign income must be converted into INR using:

• SBI TT (Telegraphic Transfer) buying rate on the date of earning the income
• Foreign exchange conversion rules specified under Income Tax Act Rule 115

This ensures accuracy in tax calculations.

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Step 6: Calculate Taxable Income in India

Based on:

• Residential status
• Classification of income
• DTAA relief

you can determine how much foreign income is taxable in India.
Add this to your total income for the financial year.

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Step 7: Claim Foreign Tax Credit (FTC)

If you have already paid tax in the foreign country, India allows Foreign Tax Credit (FTC) to avoid double taxation.

To claim FTC, you must:

1. File Form 67 online before filing the Income Tax Return
2. Provide proof of foreign tax paid (tax receipts, Form W-2, foreign assessment order, etc.)
3. Ensure income matches the returns filed abroad

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Step 8: File Income Tax Return in India

Choose the right ITR form:

• ITR-2 or ITR-3 for individuals
• ITR-6 for companies

Ensure you report:

• Foreign income
• Foreign assets
• Foreign bank accounts
• Direct or indirect interests in overseas companies

Schedule FA (Foreign Assets) must be completed accurately to avoid penalties under the Black Money Act.

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Step 9: Maintain Documentation for International Transactions

Keep proper records, including:

• Foreign bank statements
• Salary slips, invoices, contracts
• Proof of taxes paid abroad
• DTAA benefit documents
• Transfer pricing documentation (for businesses)

This step is essential for compliance and smooth audits.

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Step 10: Comply with Transfer Pricing Regulations (For Businesses)

For multinational companies:

• Maintain Arm’s Length Pricing
• Prepare mandatory Transfer Pricing documentation
• File Form 3CEB certified by a CA

This ensures that cross-border transactions between associated enterprises are compliant with Indian regulations.

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Conclusion

International Taxation may seem complex, but following a clear step-by-step process makes compliance easier and ensures you optimize your tax liability across countries. Whether you are an NRI, global investor, freelancer, or business owner, understanding DTAA benefits, foreign income reporting, and FTC rules can significantly reduce tax burden and help avoid penalties.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

Step 1: Create Login on RBI FIRMS Portal

The company must create a Business User (BU) account on the FIRMS portal.

Steps:

1. Visit FIRMS Portal
2. Select “Registration for New Business User”
3. Submit CIN, PAN, company details, and email ID
4. Approval received from RBI via email

Once approved, the company can file FC-TRS.

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Step 2: Determine Applicable Pricing Guidelines

RBI requires that share transfer valuation follows:

• Discounted Cash Flow (DCF) method for unlisted companies
• SEBI pricing formula for listed companies

A CA or merchant banker valuation certificate is required.

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Step 3: Collect All Required Documents

You must gather the following:

From the Company

• Board resolution approving transfer
• Shareholding pattern
• Declaration on compliance with FDI policy

From Transferor/Transferee

• KYC documents
• FEMA declarations
• Share transfer agreement
• SH-4 (if applicable)

Other Mandatory Documents

• CA valuation certificate
• FIRC/Proof of inward remittance
• KYC from AD Bank of foreign investor

SavingMantra Tip: Upload documents in clean, clear PDF format to avoid rejection.

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Step 4: Execute Share Transfer Deed

Depending on share transfer type:

• Form SH-4 for resident-to-non-resident transfers
• Gift deed for gift transfers
• Share Purchase Agreement (SPA) for sale transactions

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Step 5: File FC-TRS on RBI FIRMS Portal

Steps in the Business User dashboard:

1. Login as Business User
2. Select Single Master Form (SMF)
3. Choose FC-TRS
4. Enter mandatory details:
   • Transferor & transferee details
   • Share class, quantity, price
   • Fair value (as per valuation)
   • Mode of transfer (sale/gift)
5. Upload all documents
6. Submit the form to the Authorized Dealer (AD) Bank

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Step 6: AD Bank Review & Approval

The AD bank reviews:

• Valuation
• FEMA compliance
• KYC
• Remittance details
• Uploaded documents

If corrections are required, the AD bank will raise a query, which must be resolved promptly.

Once satisfied, the AD bank approves and forwards the report to RBI.

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Step 7: RBI Final Approval

After AD bank approval, the form is automatically shared with RBI.
Once verified, the transaction is considered completed and compliant.

The acknowledgment is available on the FIRMS portal for future records.

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Timeline for FC-TRS Submission

✔ FC-TRS must be filed within 60 days of share transfer or receipt of funds (whichever is earlier).
Late filing attracts FEMA penalties, compounding fees, and possible AD bank rejection.

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Documents Required for FC-TRS

Mandatory

• Valuation certificate
• Share Transfer Agreement / SH-4
• FIRC (Foreign Inward Remittance Certificate)
• KYC of foreign investor
• Board Resolution
• Declaration by transferor/transferee

Additional (if applicable)

• Gift deed
• Consent letters
• Previous FC-GPR/FC-TRS filings
• CSR or UBO declarations

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Common Mistakes That Lead to Rejection

❌ Incorrect valuation method
❌ Mismatch between share price and valuation
❌ Missing KYC from AD bank
❌ Mismatched share numbers
❌ Incorrect CIN/PAN details
❌ Failure to upload clear documents
❌ Delayed filing beyond 60 days

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Benefits of Accurate FC-TRS Filing

✔ Fully compliant FDI reporting
✔ Smooth investment transactions
✔ Boosts investor confidence
✔ Avoids FEMA penalties
✔ Ensures legality of ownership transfer

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Conclusion

FC-TRS filing is a crucial part of FDI compliance in India.
By following the step-by-step process outlined above—preparing valuation, executing documents, filing on FIRMS portal, and coordinating with the AD bank—you can ensure a seamless and fully compliant share transfer.

SavingMantra can assist you with:
✔ FIRMS portal registration
✔ End-to-end FC-TRS filing
✔ Valuation certificate coordination
✔ Documentation and AD bank queries

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

Step 1: Review Articles of Association (AOA)

Before initiating a share transfer, the company must examine the AOA to understand:

• Transfer restrictions
• Pre-emption rights
• Approval requirements
• Offer procedures for existing shareholders

The AOA acts as the primary rulebook for transfer of shares.

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Step 2: Obtain Request Letter from Transferor

The shareholder intending to transfer shares must submit a written request to the company.

The request must include:

• Name of transferor & transferee
• Number of shares to be transferred
• Share certificate details

This formally initiates the process.

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Step 3: Issue a Notice to Existing Shareholders (Right of First Refusal)

As per most AOA rules, existing shareholders must be offered the shares first.

If they decline or do not respond within the specified time, the shares can be transferred to an outsider.

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Step 4: Execute Share Transfer Deed (Form SH-4)

The transfer deed must be filled and signed by both the transferor and transferee.

Key requirements of Form SH-4:

• Share certificate details
• Consideration amount
• Properly stamped deed
• Signatures & witness details

Stamp Duty

State-wise stamp duty applies — usually 0.25% of the share value.

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Step 5: Submit Share Certificate & SH-4 to the Company

The transferor must submit:

• Original share certificate
• Duly executed SH-4 share transfer form
• Proof of stamp duty payment

The company verifies the documents before approval.

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Step 6: Board Meeting for Approval of Share Transfer

The Board of Directors must approve the share transfer.

Action Points:

• Review Form SH-4
• Verify stamp duty
• Check compliance with AOA
• Approve or reject the transfer

Once approved, the transfer becomes legally effective.

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Step 7: Update Register of Members (Form MGT-1)

After approval, the company must update:

• Register of Members
• Share ledger
• Certificate records

This step is crucial to reflect accurate ownership details.

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Step 8: Issue New Share Certificate to Transferee

Within 1 month of transfer approval, the company must:

• Cancel the old certificate
• Issue a new certificate to the transferee
• Record certificate number & distinctive numbers

This completes the transfer process.

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Documents Required for Share Transfer

• Request letter for transfer
• Form SH-4 (Share Transfer Deed)
• Original share certificate
• Proof of stamp duty payment
• PAN & KYC of transferee
• Board resolution approving transfer
• Updated Register of Members

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Legal Timelines You Must Follow

Requirement	Timeline
Execution of SH-4	Within 60 days of share transfer signing
Board approval	Within 30 days of receipt of documents
Issuance of new share certificate	Within 1 month of board approval
Stamp duty payment	As per state laws

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Common Mistakes to Avoid

❌ Not checking AOA restrictions
❌ Incorrect or unstamped SH-4
❌ Missing witness signature
❌ Failure to update Members Register
❌ Delayed issuance of new share certificate

SavingMantra Tip: Always verify stamp duty and ensure proper documentation to avoid MCA scrutiny.

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Benefits of Proper Share Transfer Compliance

✔ Legally secure ownership transfer
✔ Clear rights and responsibilities
✔ MCA-compliant records
✔ Avoid disputes among shareholders
✔ Ensures transparency and governance

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Conclusion

Transfer of shares is a structured compliance process involving approvals, valid documentation, stamping, and timely issuance of certificates.
Following the above step-by-step process ensures transparency, legality, and smooth transition of ownership in a private limited company.

SavingMantra helps companies with:
✔ SH-4 drafting
✔ Stamp duty guidance
✔ Share certificate issue
✔ Register of Members update
✔ Board resolution preparation

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

Step-by-Step Process to Add a Partner in an LLP

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Step 1: Obtain Consent of Existing Partners

The introduction of a new partner must be approved by all existing partners, unless the LLP agreement specifies otherwise.

Action Points:

• Conduct a partner meeting
• Record consent or pass a resolution
• Update capital contribution and profit sharing if needed

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Step 2: Obtain the New Partner’s KYC & Consent

The incoming partner must provide:

• PAN & Aadhaar
• Address proof
• Email & mobile number
• Consent letter to act as a partner
• Contribution details
• Digital Signature Certificate (DSC) — if becoming a Designated Partner

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Step 3: Apply for DPIN (If Becoming Designated Partner)

If the new partner will act as a Designated Partner, they must have a DPIN (Designated Partner Identification Number).

This is applied through:

• Form DIR-3 (for individuals not holding DIN/DPIN)

If the person already has a DIN/DPIN, this step is skipped.

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Step 4: Draft Supplementary LLP Agreement

The agreement must be updated to reflect:

• New partner’s name
• Contribution amount
• Profit-sharing ratio
• Rights & obligations
• Roles (Partner / Designated Partner)

This supplementary agreement must be notarized and stamped.

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Step 5: File Form 4 on MCA Portal

Within 30 days of partner admission, Form 4 must be filed with MCA.

Attachments required:

• Consent of new partner
• Resolution or approval letter
• Supplementary LLP Agreement
• KYC documents
• DPIN (if applicable)

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Step 6: File Form 3 for Agreement Changes

After Form 4, you must file Form 3 to update the LLP Agreement.

Form 3 includes:

• Revised contribution
• Updated profit-sharing
• Updated partner details

Both Form 3 and Form 4 must be filed to complete the addition process.

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Step-by-Step Process to Remove a Partner from an LLP

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Step 1: Partner Resignation or Removal Notice

A partner may exit through:

• Voluntary resignation
• Automatic removal (as per LLP agreement terms)
• Mutual decision of partners

A Resignation Letter or Notice of Removal is required.

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Step 2: Acceptance & Resolution by Existing Partners

Remaining partners must accept the resignation and pass a formal resolution.

Action Points:

• Conduct partner meeting
• Approve removal/resignation
• Decide revised contribution and profit-sharing ratios

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Step 3: Settlement of Dues (If Any)

If applicable, settle:

• Capital contribution
• Profit share up to exit date
• Liabilities or responsibilities

A settlement confirmation may be included in the minutes.

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Step 4: Execute Supplementary LLP Agreement

Update the agreement to remove the partner’s:

• Name
• Contribution
• Profit share
• Rights & responsibilities

This agreement must be notarized and stamped.

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Step 5: File Form 4 for Removal

Removal of a partner must be reported in Form 4 within 30 days.

Attachments:

• Resignation letter / removal notice
• Resolution for acceptance
• Supplementary LLP Agreement

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Step 6: File Form 3 for Updated LLP Agreement

Finally, file Form 3 to update the LLP Agreement after removal.

This completes the official removal process.

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Documents Required (Addition & Removal)

For Adding a Partner

• PAN, Aadhaar, KYC documents
• Consent letter (Form 6)
• Resolution of partners
• Supplementary Agreement
• DPIN (if applicable)

For Removing a Partner

• Resignation letter / removal notice
• Acceptance resolution
• Settlement confirmation (if applicable)
• Supplementary Agreement

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Timelines & Compliance

Action	Timeline
Form 4 filing	Within 30 days of change
Form 3 filing	Within 30 days of Agreement update
DPIN application	Before partner addition

Failing to file forms on time can attract penalties under MCA rules.

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Benefits of Proper Partner Change Compliance

✔ Ensures legal validity of partner structure
✔ Updates public records on MCA portal
✔ Prevents penalties and notices
✔ Maintains transparency and governance
✔ Protects LLP from disputes

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Conclusion

Adding or removing partners in an LLP is a structured process involving resolutions, agreement updates, MCA filings, and proper documentation.
By following the step-by-step guidelines above, LLPs can ensure complete legal compliance and smooth transitions in ownership or management.

SavingMantra can help with:
✔ Drafting resolutions & agreements
✔ Preparing Form 3 & Form 4
✔ DPIN assistance
✔ Complete partner addition/removal documentation pack

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

Step-by-step process to file CSR-1 (web-based MCA21 flow)

1. Create / login to MCA account
   Sign in at the MCA21 portal. If you don’t already have an MCA account, create one using a valid email and mobile. Use the authorised signatory’s credentials or arrange DSC as required. https://www.taxmann.com+1
2. Open the CSR-1 web form
   Navigate: MCA Services → e-Forms / CSR / CSR-1 (Registration of Entities for undertaking CSR Activities). The MCA now exposes CSR-1 as a web form (no offline PDF needed). https://www.taxmann.com
3. Fill entity details
   Enter basic information: legal name, type of entity (Trust, Society, Section-8, other), registration number, date of registration, PAN, registered office address, contact person and email/phone. Declare whether the entity is established by any company or group of companies. Accounting for NGOs+1
4. Provide governance & project info
   Give details of governing body members (names, PANs, designations), primary CSR activities you undertake, geographic coverage and sample projects. Upload a succinct CSR/project note and your CSR policy (board-approved) if available. India Briefing+1
5. Attach mandatory documents
   Upload scanned copies (PDF/JPG as allowed) of PAN, registration certificate (or COI), 12A/80G (if available), governing body list, and DSC-signed authorization letter for the person submitting the form. Vakilgiri+1
6. Certification by professional (where applicable)
   Certain entries require certification by a practicing professional (CA/CS/CWA) as per the CSR rules/handbook — ensure the certificate is attached where the form asks for member certification. (Refer the ICAI/handbook guidance for certification scope.) CSR IC AI
7. Validate & Submit
   Use the form’s Validate button, correct any errors, then Submit. Pay the nominal filing fee if the portal requires it. After submission you will get an SRN/acknowledgement and, on approval, a CSR Registration Number / certificate from MCA. cleartax+1

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Typical timeline

• When all documents are accurate, registration is usually processed quickly (often within a few working days) — but timeline depends on portal load and queries raised by MCA. Some third-party service providers report same-week turnaround for straightforward filings. Vakilgiri+1

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Post-registration duties & best practices

• Keep CSR profile updated: If project focus, governing body, address or bank details change, update your CSR-1 details on MCA as per the portal’s update flow. https://www.taxmann.com
• Maintain transparency: Maintain project documentation, utilization certificates, beneficiary lists and audited accounts for receipts of CSR funds. Companies funding you will require these for their CSR reporting. Ministry of Coal
• Get a formal MoU / agreement with funding companies specifying scope, deliverables, reporting cadence, and inspection rights. PSR Compliance

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Common filing mistakes to avoid

• Uploading expired or mismatching PAN/registration docs.
• Not attaching board-approved CSR policy or project note (makes companies hesitant).
• Incorrect/partial governing-body data (missing PANs or signatures).
• Submitting without DSC where the portal requires digital authentication.
• Not having adequate systems to issue utilization certificates / audited receipts after receiving funds.
  Avoid these — they are the main reasons MCA or funders raise objections. BuiltX+1

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How SavingMantra helps (plug-and-play)

SavingMantra can make this turnkey:

• Pre-check your documents (PAN, registration, 12A/80G) and prepare a board-approved CSR policy template.
• Draft the CSR project note, beneficiary templates and MoU for funding companies.
• Fill and submit the CSR-1 web form on MCA21 on your behalf and track SRN/status until registration certificate is issued.
• Set up simple reporting templates (utilization certificate, progress reports, photos/records) so companies can close CSR disbursements quickly.

If you want, I can generate a ready-to-use CSR-1 supporting document pack (CSR policy template, project note, governing body table, DSC authorization and sample MoU) tailored to your entity type — tell me the entity type (Trust / Society / Section-8) and I’ll produce the documents immediately.

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Authoritative & practical references

• MCA: web-based CSR-1 rollout and filing on MCA21 (web form introduced July 2025). https://www.taxmann.com
• MCA FAQs and clarifications on when CSR-1 is required (companies vs implementing agencies). Ministry of Coal
• Practical filing checklists & sample form guides (Cleartax / ComplianceGyan / legal guidance). cleartax+1
• ICAI handbook on certification of Form CSR-1 (practitioner guidance). CSR IC AI

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The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

Step 1: Partners Pass a Resolution for Closure

The LLP partners must mutually agree to close the entity.

Action Points:

• Conduct a meeting of designated partners.
• Pass a resolution supporting closure.
• Record the date and keep it for filing.

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Step 2: Statement of Accounts (Not Older Than 30 Days)

The LLP must prepare a Statement of Accounts reflecting:

• No assets
• No liabilities
• No outstanding dues
• No revenue

This statement must be certified by a practicing Chartered Accountant and should not be older than 30 days before filing Form LLP-24.

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Step 3: Prepare Affidavits & Declarations from Partners

All designated partners must sign:

1. Affidavit for Strike Off
   Declaring that the LLP has no liabilities.
2. Declaration of Non-operation
   Confirming that the LLP has ceased business from a specific date.
3. Indemnity Bond (Optional in some states)
   Partners indemnify the government against future claims.

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Step 4: Close the LLP Bank Account

If the LLP had an active bank account:

• Close the account
• Collect the Bank Closure Letter
• Attach it with the application

This step is mandatory for Form LLP-24 approval.

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Step 5: File Pending MCA Annual Returns (If Any)

If the LLP has not operated since formation, filings may not be required.
But if there were any transactions, the LLP must file:

• Form 11 – Annual Return
• Form 8 – Statement of Accounts & Solvency

This avoids penalties during the strike-off process.

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Step 6: Prepare Documents for LLP Closure Submission

You must compile the following:

Required Documents

• Resolution for LLP closure
• Affidavit by designated partners
• Statement of Accounts (CA certified)
• Bank closure proof
• ITR acknowledgment (if filed)
• Consent of partners
• LLP Agreement and supplementary deeds
• PAN card + address proof of partners

SavingMantra Tip: Keeping all documents in one PDF helps speed up approval.

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Step 7: File Form LLP-24 on MCA Portal

Now prepare and file Form LLP-24 with MCA.

You must attach:

• Application for strike-off
• Statement of accounts
• Affidavits
• Resolution
• Partner’s consent
• Bank closure letter

Pay the MCA fees and submit the form.

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Step 8: MCA Review & Approval

After submission:

• MCA examines the documents
• If correct, LLP name is published on the public strike-off list
• After no objections, MCA issues Final Strike-Off Order

Your LLP is now officially closed.

Typical timeline: 3–6 months depending on pending compliances and MCA processing speed.

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Benefits of Proper LLP Closure

✔ Avoids heavy penalties for non-filing
✔ No future tax or compliance obligations
✔ Legal closure ensures transparency
✔ Peace of mind from government notices
✔ Clean exit for partners

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Common Mistakes to Avoid

❌ Filing LLP-24 without closing bank account
❌ Incorrect or outdated Statement of Accounts
❌ Missing affidavits or partner signatures
❌ Filing without clearing old MCA dues
❌ Not completing pending annual returns

SavingMantra Recommendation: Always cross-check MCA filing status before initiating closure.

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Conclusion

Closing an LLP is a structured legal process that requires proper documentation, partner approval, and MCA filings.
By following the step-by-step LLP Closure process, you can ensure a smooth, compliant exit without penalties or legal difficulties.

If you need help drafting the documents, affidavits, resolutions, or preparing Form LLP-24, SavingMantra can assist you with complete compliance support.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

1. Board meeting & resolution
   • Convene a Board meeting to approve strike-off application. Record the minutes.
2. Prepare documents
   • Board resolution, special resolution (if required by AoA), affidavit by directors confirming no assets/liabilities, statement of assets & liabilities (audited or certified by CA), indemnity / NOC from creditors (if any), copy of latest financial statements, copies of GST/TAN/PAN status. Corpbiz+1
3. File Form STK-2 (application to ROC)
   • Company files Form STK-2 (or the ROC-prescribed application) with the Registrar of Companies along with attachments and prescribed fee. The ROC will examine. Ebizfiling+1
4. ROC public notice & objection period
   • ROC publishes a public notice (on MCA/ROC website and the Official Gazette). Authorities (tax, banks, regulators) and third parties have time to file objections. If no objections, ROC proceeds. lawsikho.com+1
5. Final strike-off / STK-7 publication
   • If satisfied and no objections, ROC strikes off the name and issues Form STK-7 / publishes dissolution in the Gazette — company stands dissolved from that date. IndiaFilings+1

Typical timeline: A few weeks to a few months depending on ROC backlog and whether objections arise. (Time varies across ROC jurisdictions.) Strikeoff

Key cautions: Do not apply for strike-off if there are outstanding creditors, pending tax notices, ongoing litigation, or undisclosed liabilities — directors can be held personally liable if issues surface later. LegalDev

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Route B — Voluntary Liquidation (orderly closure with assets & creditors)

When to use: Company solvent or has assets & creditors; shareholders want to wind up and pay creditors in an orderly way. Since the voluntary winding-up regime was impacted by IBC, current practice often uses insolvency/liquidation under IBC rules. ICSI+1

Step-by-step (voluntary liquidation)

1. Board meeting + special resolution
   • Board proposes winding up; shareholders pass a special resolution (usually 75%+) approving voluntary liquidation. TaxGuru
2. Appointment of Insolvency Professional (IP) / Liquidator
   • Appoint a licensed Insolvency Professional to act as liquidator to manage asset realization, creditor claims and distribution. ICSI+1
3. Public notice & creditor claims
   • Liquidator publishes notice inviting claims by creditors and settles objections. Creditors may vote/raise claims as per process. The Legal School
4. Realize assets and pay liabilities
   • Liquidator realizes assets, pays secured/unsecured creditors as per priority, pays liquidation costs and statutory dues. ICSI
5. Final report & dissolution
   • Liquidator files a final report with the tribunal/ROC (as applicable) and the company is dissolved once formalities complete. The Legal School

Typical timeline & cost: More time and cost than a strike-off. Depends on asset realization and creditor mix — can range from months to over a year for complex cases. The Legal School

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Route C — Compulsory winding up (by NCLT)

When creditors or certain authorities petition NCLT to wind up the company (insolvency or statutory grounds). This is initiated by third parties — consult counsel immediately if you receive such notice. TaxGuru

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Practical compliance checklist before filing (must-do)

• Clear all statutory filings up to date (ROC annual returns, financial statements). TaxGuru
• Obtain tax clearances / file final GST returns and intimate CBDT/CBDT if needed. Close GST registration (if applicable). TaxGuru
• Close bank accounts and service contracts, cancel licenses (shop license, import-export code etc.).
• Secure NOCs from creditors (if any) and a certificate from a practicing CA/CS stating statement of assets & liabilities when required. Corpbiz
• Retain digital copies of all records for statutory retention period (usually 8 years for company records).
• If directors are to give affidavits / declarations — ensure accuracy and full disclosure. False declarations risk prosecution. lawsikho.com

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Documents usually required (strike-off / voluntary closure)

• Board resolution and copy of minutes.
• Special resolution of shareholders (if required).
• Affidavit by directors (no outstanding liabilities).
• Statement of assets and liabilities (auditor/CA certified).
• NOC/consent letters from creditors (if any).
• Copies of latest audited financials, income tax returns, GST final returns / cancellation proofs.
• Copy of incorporation certificate, AoA/MoA, PAN/TAN details. Corpbiz+1

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After dissolution — close these loose ends

• Keep proof of ROC dissolution (STK-7 / Gazette).
• Keep records of final tax filings & receipts.
• Retain all company books & records for statutory retention period.
• If you need to revive the company later (rare), there is a limited revival route — consult counsel quickly. TaxGuru

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Common pitfalls & how SavingMantra helps

• Pitfall: Filing strike-off with undisclosed creditors → director liability later.
  Fix: We run a pre-closure audit to detect contingent liabilities and obtain creditor NOCs.
• Pitfall: Missing tax/GST final returns → objections from tax authorities.
  Fix: We prepare and file all final returns, assist with cancellations and obtain clearances.
• Pitfall: Incorrect forms or signatures → ROC rejection & delay.
  Fix: We prepare documents, e-file forms (STK-2, etc.), and track ROC communications until STK-7 is published.

If you want, SavingMantra can prepare the full closure pack (board minutes, director affidavits, CA certificate, STK-2 filing and liaison with ROC and tax authorities) and run a pre-closure risk scan.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

Step 1: Pass Board Resolution for Share Allotment

Before issuing certificates, the company must formally approve allotment.

Action points:

• Conduct a board meeting.
• Pass a resolution approving the allotment of shares.
• Record details of shareholders, shares allotted, and consideration received.

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Step 2: Update Register of Members (Form MGT-1)

After allotment, the company should update the member records.

Action points:

• Enter shareholder name, address, PAN, and number of shares.
• Mention distinctive numbers and certificate number.
• Record date of allotment.

This register becomes the primary source while preparing certificates.

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Step 3: Pay Stamp Duty on Share Certificates

Stamp duty is mandatory and varies by state. It must be paid on the value of shares allotted, not on the face of the certificate.

Action points:

• Pay stamp duty via the SHCIL portal or state e-stamp system.
• Keep the challan/e-stamp receipt for records.
• Ensure duty payment within 30 days of allotment.

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Step 4: Prepare the Share Certificate Format

The company must use a standardized structure as per Form SH-1.

Key details to include:

• Company name, CIN & registered address
• Certificate number
• Folio number
• Name of shareholder
• Number and class of shares
• Distinctive number range
• Date of issue
• Seal of the company (if applicable)

SavingMantra Tip: Use tamper-proof paper or digital certificate format (if permitted).

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Step 5: Verify Shareholder Details

Before printing or generating certificates, cross-check all information.

Verification checklist:

• PAN and KYC details
• Number of shares allotted
• Proper sequence of distinctive numbers
• Spelling of names as per official documents

This step helps avoid compliance errors and future disputes.

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Step 6: Sign the Share Certificate

The certificate becomes valid only when properly signed.

Signing rules:

• Must be signed by two directors, OR
• One director and the company secretary, OR
• One director with an authorized person (if no CS exists)
• Digital signatures may be used where legally allowed.

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Step 7: Issue or Deliver the Share Certificate to Shareholder

The company must issue the certificate within 60 days from the date of allotment.

Delivery methods:

• Physical handover with acknowledgment
• Registered post/courier
• Digital certificate with tracking (if permitted)

Maintain a Share Certificate Issue Register for compliance.

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Documents Required for Share Certificate Preparation

• Board Resolution for allotment
• Register of Members (MGT-1)
• Proof of stamp duty payment
• Share application forms
• PAN/KYC of shareholders
• Share certificate book or digital template

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Common Mistakes to Avoid

❌ Incorrect distinctive numbers
❌ Missing signatures
❌ Delay in stamp duty payment
❌ Wrong shareholder name or address
❌ Issuing certificates without board approval

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SavingMantra Compliance Tip

To avoid penalties, ensure:
✔ Allotment filings (PAS-3) are completed
✔ Stamp duty is paid within 30 days
✔ Certificates issued within 60 days
✔ Registers are updated regularly

If you need, I can also create downloadable formats:
📄 SH-1 Share Certificate Template
📊 Register of Members (Excel)
📑 Share Certificate Issue Register
📝 Board Resolution for Allotment

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Conclusion

Share certificate preparation is a structured compliance process involving approvals, stamping, documentation, and timely issuance. Following the correct steps ensures transparency, legal compliance, and smooth shareholder communication.

SavingMantra helps businesses streamline statutory documentation and filing processes with accuracy and speed.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

Introduction

With increasing focus on flexibility, limited liability protection, and ease of compliance, many traditional partnership firms are converting into Limited Liability Partnerships (LLPs). LLPs offer a modern business structure with the combined advantages of partnership and corporate identity—making them ideal for professionals, SMEs, and growing businesses.

To help businesses transition smoothly, Saving Mantra provides a structured, compliant, and step-by-step conversion service from Partnership Firm to LLP.

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Why Convert a Partnership to LLP?

Converting to LLP offers major advantages:

• Limited liability protection for partners
• No limit on the number of partners
• Separate legal identity
• Lesser compliance burden compared to companies
• Flexible management structure
• Easy capital and ownership restructuring

A proper legal conversion process ensures continuity of business without affecting contracts, assets, or liabilities.

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Step-by-Step Process for Converting a Partnership Firm into LLP

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Step 1: Understanding Eligibility Requirements

Before starting the process, we check:

• Whether all partners agree to the conversion
• Whether the partnership firm is registered (recommended)
• Whether there are pending disputes, litigation, or debts
• Whether the name of the firm can be reserved as LLP name

A compliance checklist is shared to ensure readiness.

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Step 2: Partners’ Consent & Execution of Resolution

All partners must:

• Give written consent
• Approve the decision to convert
• Authorize one or more partners to complete legally required filings

This ensures that the conversion is legally valid.

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Step 3: Obtain Digital Signature (DSC) & DIN for Partners

For LLP incorporation:

• All designated partners require Digital Signature Certificates (DSC)
• Partners must apply for Designated Partner Identification Number (DPIN/DIN)

Saving Mantra manages both issuance and verification.

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Step 4: Apply for Name Reservation

Using RUN-LLP (Reserve Unique Name), we apply for the LLP name.
Usually, LLP continues with the same name as the partnership, provided:

• “LLP” suffix is added
• The name is available on the MCA portal

We ensure the name complies with MCA naming guidelines.

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Step 5: Prepare LLP Incorporation Documents

We draft:

• Incorporation Form FiLLiP
• Consent of designated partners
• Proof of registered office
• Proposed business activity
• Details of partnership firm

These documents form the base of LLP creation.

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Step 6: Filing of Conversion Form – Form 17

This is the key legal filing for conversion.

Form 17 includes:

• Statement of partners
• Statement of assets & liabilities
• List of creditors and their consent
• Copy of partnership deed
• NOC from tax authorities (if required)
• Financial statements of the firm

Saving Mantra ensures complete accuracy to avoid rejection or resubmission.

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Step 7: Filing FiLLiP (LLP Incorporation Form)

We submit FiLLiP along with Form 17:

• Details of partners
• Registered office
• Capital contribution
• Designated partners’ particulars
• Attachments and declarations

MCA processes both forms concurrently.

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Step 8: Issue of Certificate of Registration (Conversion Approval)

Once the ROC verifies all documents:

• LLP is officially registered
• Certificate of Registration is issued under Section 58
• Partnership firm legally ceases to exist

The business continues seamlessly under the LLP structure.

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Step 9: Execute & File LLP Agreement (Form 3)

Within 30 days of conversion, the LLP Agreement must be filed.

Agreement includes:

• Rights & duties of partners
• Capital contribution
• Profit-sharing ratio
• Management structure
• Indemnity and exit terms

Saving Mantra drafts a customized LLP Agreement aligned with business needs.

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Step 10: Update PAN, TAN, Bank & Other Registrations

After conversion, we update:

• PAN and TAN
• GST registration
• MSME, Shops & Establishment
• Professional Tax
• Trade licenses
• Bank account KYC
• Contracts, leases & agreements

This ensures smooth operational continuity.

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Step 11: Intimation to Authorities & Stakeholders

We prepare intimation letters for:

• Vendors
• Clients
• Government departments
• Tax authorities
• Employees

This ensures full legal and commercial transparency.

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Step 12: Post-Conversion Compliance

After LLP formation, mandatory compliance includes:

• Annual filing (Form 11 & Form 8)
• Partner changes (if any)
• Maintenance of books & accounts
• Audit (if turnover exceeds limits)

Saving Mantra ensures ongoing compliance throughout the year.

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Benefits of Saving Mantra Partnership-to-LLP Conversion Services

• 100% ROC-compliant workflow
• Expert drafting & documentation
• Zero-error filing support
• Fast turnaround with dedicated specialists
• End-to-end guidance including post-conversion compliance

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Conclusion

Converting a Partnership Firm into an LLP is a strategic move that enhances legal protection, credibility, and operational flexibility. However, the conversion requires accurate documentation, partner approvals, and MCA filings.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances. All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.