LLP to Sole Proprietorship

An LLP cannot be converted into Sole Proprietorship. Limited Liability Partnership Rules, 2009 does not contain any provisions for the conversion of an LLP into a Sole Proprietorship. Though vice-versa is legally admissible.

Can a Limited Liability Partnership(LLP) be converted into a Sole Proprietorship firm?

 

No, an LLP cannot be converted into a Sole Proprietorship firm. Limited Liability Partnership Rules, 2009 does not contain any provisions for the conversion of an LLP into a Sole Proprietorship

  • Number of Owners

In Limited Liability Partnership, there is a statutory requirement of having a minimum of two partners with no upper limit. Hence an LLP can have multiple owners. Whereas, there can be only one single owner called the proprietor under Sole Partnership.

  • Area of Jurisdiction

Limited Liability Partnership registration is governed under the jurisdiction of Central Government. Whereas, Sole Proprietorship registration is governed by State Government jurisdiction. 

Why should I register an LLP over Sole Proprietorship?

An LLP is usually opted by such entrepreneurs, who prefer to carry out their business in a conventional style, by having partners in their business. In an LLP, partners have a privilege of a limited liability, to the extent of their capital contribution in the business. To get a detailed insight to register an LLP over Sole Proprietorship, visit Advantages of LLP and Never Register a Sole Proprietorship

Why should I register a Sole Proprietorship over LLP?

Sole Proprietorship is the simplest form of business. It is characterised with minimal government regulation, compliances and no annual audit requirement. The proprietor needs to file a simple Tax return along with their own Income tax return. However, the liability of the owner is unlimited. To get a reason to register a Sole Proprietorship over an LLP then Visit Sole Proprietorship India

 


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