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Why you should think before converting your partnership to an LLP

Ever since a Limited Liability partnership became an option, people have gotten quick at converting a partnership to an LLP. The limited liability aspect of an LLP enamours them. They don’t stop to think whether converting into an LLP is the right idea for a partnership firm. Here is why you should think twice before converting partnership to LLP.

The best business entities are the ones that make you feel safe. They are the business infrastructures that you can trust with your eyes closed. You believe in the organization they provide and the way they set you up to do business. 

That leads to the conversion of a partnership to an LLP. 

However, have you ever stopped to think whether it was the right idea?

What if your business doesn’t turn out at all the way you envisioned?

And what if, starting a limited liability partnership isn’t the best course of action for your business? 

I have pondered upon this fact for a long time. And I have realized that there are aspects of a partnership firm that I don’t want to lose. Because that’s what will happen if I go through the conversion procedure.

What are those aspects?

Let us take a look.

The freedom of choice will go away

A partnership firm is nothing more than a joint business venture. It is not the name of the business infrastructure. Instead, it is the title given to the coalition of partners. It is up to them to direct the flow of business however they want. They don’t have any legal restrictions. Why?

It’s because they are not a legal business entity. While they still have to only conduct ethical businesses, they don’t have to answer to authorities such as the MCA – Ministry of Corporate Affairs. 

When you incorporate an LLP, you come under the watchful eye of the Ministry of Corporate affairs. You can’t fly under the radar anymore.

Related Service: How to convert proprietorship to Pvt ltd

Partners won’t have equal value anymore

One thing that has always attracted people towards a partnership firm is the level of responsibility each partner share. It is equal. Most partnership deeds state that all the partners must have equal responsibilities and must earn equally. However, conversion makes leader among the partners. These “designated partners” will have the final say about making decisions for a company. It will have a negative impact in those cases where it’s necessary for all the partners to have an equal contributions.

You will lose interest in your business

The fear of losing makes you work harder. That’s what unlimited Liability does for your business. However, after conversion to limited liability partnership, you gain the perk of limited liability. In layman’s terms, it reduce the stakes. Consequently, you don’t have any fear looming over you saying that the loss of LLP would spell a loss for you. 


An LLP is a business entity that gives you everything, but also takes a lot of fear away. If that fear was a factor driving you forward, losing the partnership firm might not be a good idea. Consult with Registrationwala for further details.

Related Article: How to become a Surveyor and Loss Assessor?

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