Second Schedule explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The Second Schedule, which applies under section 55, sets out how a partnership firm converts into an LLP. It has seventeen paragraphs: definitions, eligibility, the statements to be filed, registration, effect of registration, handling of property, pending proceedings and contracts, the continuing personal liability of the partners for old debts, and a duty to state the conversion on official correspondence for twelve months. For a conversion project, our LLP registration service handles the incorporation side.
A firm may convert if and only if the partners of the LLP comprise all the partners of the firm and no one else (para 3). All partners file a statement with the Registrar, with the incorporation document and statement under section 11 (para 4). On registration the LLP exists, property and liabilities vest in it without further assurance, act or deed, and the firm is deemed dissolved (para 7). Partners remain personally liable, jointly and severally with the LLP, for pre-conversion liabilities (para 16). The LLP must show its conversion on official correspondence for twelve months or face a fine (para 17).
Where it fits
Section 55 says a firm may convert into an LLP "in accordance with the provisions of this Chapter and the Second Schedule". Section 58 provides for the registration and effect of conversion. See our articles on section 55 and section 58. For the filing, see our post on Form 17 under section 55 and our guide on how to file LLP Form 17.
The 2021 Act made no change to the Second Schedule. Its clause 2 replaces references to "the Companies Act, 1956" throughout the Act with "the Companies Act, 2013"; the Second Schedule's own wording refers chiefly to the Indian Partnership Act, 1932 and to the Tribunal.
Paragraph-by-paragraph
| Para | Subject |
|---|---|
| 1-3 | Meaning, conversion, eligibility |
| 4-6 | Statements, registration, refusal and appeal |
| 7-8 | Effect of registration; registered property |
| 9-15 | Proceedings, judgments, agreements, contracts, employment, authority, licences |
| 16 | Partners' continuing liability |
| 17 | Notice of conversion and fine |
Paragraphs 1 to 3: meaning, conversion and eligibility
A "firm" is a firm as defined in section 4 of the Indian Partnership Act, 1932. Paragraph 3 is the gate: a firm may apply "if and only if the partners of the limited liability partnership into which the firm is to be converted, comprise, all the partners of the firm and no one else". So a conversion cannot be used to leave out a partner or bring in a new one at the same time. Admission or exit should be dealt with before or after, under sections 24 and 25. The Act does not say whether a firm must be registered under the Partnership Act to convert; paragraph 4(a) refers to a registration number "if applicable".
Paragraph 4: what is filed
The firm applies by filing with the Registrar:
- (a) a statement by all of its partners, "in such form and manner and accompanied by such fee as the Central Government may prescribe", containing the name and registration number (if applicable) of the firm and the date on which the firm was registered under the 1932 Act or any other law, if applicable; and
- (b) the incorporation document and statement referred to in section 11.
Our article on section 11 covers the incorporation document. The form and fee are in the rules; the LLP Rules, 2009 as amended prescribe them, and we state no fee here.
Paragraph 5: registration and the fifteen days
On receiving the documents, the Registrar, "subject to the provisions of this Act, register the documents and issue a certificate of registration in such form as the Registrar may determine", stating that the LLP is registered "on and from the date specified in the certificate". The proviso requires the LLP, "within fifteen days of the date of registration", to inform the concerned Registrar of Firms with which the firm was registered under the 1932 Act of the conversion and the particulars of the LLP, in the form and manner the Central Government prescribes.
Paragraph 6: refusal and appeal
"Nothing in this Schedule shall be construed as to require the Registrar to register any limited liability partnership if he is not satisfied with the particulars or other information furnished". An appeal may be made to the Tribunal against refusal. A further proviso, marked in the footnote as inserted by a G.S.R. notification (the number is not legible in our copy), says that until the Tribunal was constituted under the Companies Act, 1956, the appeal could be made before the Company Law Board. The Registrar may also require the documents to be verified in the manner he considers fit (para 6(2)).
Paragraph 7: effect of registration
On and from the date of registration in the certificate:
- there is an LLP by the name in the certificate;
- all tangible (movable and immovable) and intangible property of the firm, and all assets, interests, rights, privileges, liabilities, obligations and the whole undertaking "shall be transferred to and shall vest in the limited liability partnership without further assurance, act or deed"; and
- the firm is "deemed to be dissolved and if earlier registered under the Indian Partnership Act, 1932 removed from the records maintained under that Act".
Paragraph 8: registered property
If property to which paragraph 7(b) applies is registered with any authority, the LLP must, "as soon as practicable after the date of registration", take all steps required by the authority to notify it of the conversion and the particulars of the LLP, in the medium and form the authority specifies. The paragraph gives no number of days.
Paragraphs 9 and 10: proceedings and judgments
Proceedings by or against the firm pending in any Court, Tribunal or before any authority on the date of registration "may be continued, completed and enforced by or against the limited liability partnership" (para 9). Any conviction, ruling, order or judgment in favour of or against the firm "may be enforced by or against" the LLP (para 10). The use of "may" leaves it open; the text does not say they must.
Paragraphs 11 to 14: agreements, contracts, jobs and authority
- Para 11: every agreement to which the firm was a party, "whether or not of such nature that the rights and liabilities thereunder could be assigned", has effect as if the LLP were a party instead of the firm.
- Para 12: all deeds, contracts, schemes, bonds, agreements, applications, instruments and arrangements subsisting immediately before registration continue as if they relate to the LLP and are enforceable by or against it.
- Para 13: every contract of employment under paragraph 11 or 12 continues with the LLP as employer.
- Para 14: every appointment of the firm in any role and any authority or power conferred on it takes effect as if given to the LLP.
Paragraph 15: approvals, permits and licences
Paragraphs 7 to 14 apply to any approval, permit or licence issued to the firm under any other Act and in force just before registration, "subject to the provisions of such other Act under which such approval, permit or licence has been issued". So a licence may need a fresh step under its own law. For tax and GST registrations, see our income-tax guides and GST posts; the Schedule does not name them.
Paragraph 16: partners stay personally liable
"Notwithstanding anything in Paragraphs 7 to 14 (both inclusive), every partner of a firm that has converted into a limited liability partnership shall continue to be personally liable (jointly and severally with the limited liability partnership) for the liabilities and obligations of the firm which were incurred prior to the conversion or which arose from any contract entered into prior to the conversion." A partner who discharges such a liability is "entitled (subject to any agreement with the limited liability partnership to the contrary) to be fully indemnified by the limited liability partnership" (para 16(2)). Conversion therefore does not wipe out old personal liability. Compare the limited liability under section 27 and 28; see our article on section 28.
Paragraph 17: notice of conversion
For twelve months, starting "not later than fourteen days after the date of registration", every official correspondence of the LLP must bear (a) a statement that it was, from the date of registration, converted from a firm into an LLP, and (b) the name and registration number, if applicable, of the firm. Under 17(2), an LLP that contravenes this "shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees and with a further fine which shall not be less than fifty rupees but which may extend to five hundred rupees for every day after the first day after which the default continues". The 2021 Act did not convert this to a penalty; read the paragraph as printed, and check the official text.
Example. Anand & Associates, a three-partner firm, converts on a certificate dated 1 April. Starting no later than 15 April and for twelve months, its invoices, letters and emails say it was converted from a firm, with the firm's name and registration number. By 16 April it must have informed the Registrar of Firms, and any property registered with other authorities must be notified as soon as practicable. A creditor of the firm may still look to each of the three partners personally for pre-conversion debts.
Need help converting a firm?
Conversion needs the right sequence: a name, the incorporation document, the partners' statement, then the fifteen-day intimation and the letterhead notice. Our LLP registration team can manage the steps from the application to the aftermath.
Key takeaways
- The partners of the LLP must be all the partners of the firm and no one else (para 3).
- The Registrar registers and issues a certificate; the LLP informs the Registrar of Firms within fifteen days (para 5).
- On registration the firm's property and liabilities vest in the LLP and the firm is deemed dissolved (para 7).
- Contracts, employment and proceedings carry over; licences follow their own Act (paras 9 to 15).
- Partners remain personally liable, jointly and severally, for pre-conversion liabilities (para 16).
- The LLP must carry the conversion notice for twelve months; default draws a fine (para 17).
Read next
- Section 55: conversion from a firm into an LLP
- Section 58: registration and effect of conversion
- Third Schedule: conversion of a private company into an LLP
- Form 17 Under Section 55: Converting a Firm Into an LLP
Disclaimer: Based on the Limited Liability Partnership Act, 2008 as amended by the Limited Liability Partnership (Amendment) Act, 2021, as consulted on 1 October 2026. Forms, fees and procedure are set by the LLP Rules, 2009 as amended from time to time. This article is general information, not legal advice; check the official text before acting.