Conversion into a Limited Liability Partnership

What types of business entity can convert to LLP?

Conventional Partnerships convert to LLP

Requirements to qualify for LLP conversion:

  • Partnership registered under the Registration of Businesses Act 1956.
  • Any partnership established by two or more persons for carrying on any professional practice.
  • Partners must remain the same after conversion.
  • The conventional partnership is able to pay its debts.
  • For professional practice, an approval letter is required from the governing body.

Private Limited Company i.e. SDN BHD convert to LLP

Requirements to qualify for LLP conversion:

  • Shareholders must remain the same after conversion.
  • There are no subsisting security interests in the Company’s assets.
  • The private company is able to pay its debts.
  • All outstanding statutory fees to government agencies has been settled.
  • The company has advertised at least in a newspaper widely circulated in Malaysia and published a notification in the Gazette for its intention to convert into a limited liability partnership.
  • All creditors of the company are agreed to the above conversion.

Consequences on Conversion of Conventional Partnership / Private Limited Company into a LLP

After the conversion into an LLP, the conventional partnership or private limited company shall be deemed to be dissolved.  The effect on the conversion means that the properties, interests, rights, privileges, liabilities, obligations and the undertaking of the conventional partnership / private limited company are transferred to LLP, such as below:

  1. All assets held by conventional partnership / Sdn Bhd will be vested to LLP.
  2. All pending proceedings may be continued, completed and enforced against or by the LLP.
  3. Any conviction, ruling, order or judgement may be enforced by or against the LLP.
  4. Existing agreements and contracts shall have effect as though the LLP were a party.
  5. The Partners and the Directors shall continue to be personally liable (jointly and severally with the LLP) for liabilities and obligations incurred prior to the conversion.
  6. Permit or License issued under the conventional partnership or private limited company will be invalid, the LLP may need to reapply the permit or license under its name.

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