Ans. a.

There are multiple advantages of a company over a partnership that must be taken into consideration:

A company is a separate legal entity while a partnership isn't. Hence, there is limited liability of a company's shareholders, chairpersons, and directors. In case of insolvency or business failure, the partners in a partner become personally liable, and hence, their assets come under risk for the exhaustion of debts. However, the liabilities of a company do not become personal liabilities for its shareholders or directors. In the case of the solvency of a company, assets that belong to the legal entity that is the company, are used to clear its debts.

The separate existence allows a company to gain a reputation advantage in the market with which it can easily extract consumer and supplier confidence. It becomes easier to deal with investors and large organizations as a company than as a partnership. The labor market is also inclined towards companies and hence, the flow of quality workforce is directed majorly towards companies.

For risky investments, financial institutions prefer to extend financial credit to companies than to partnerships. The borrowing capacity of companies is larger than that of partnerships for they can issue debentures, accept deposits from the public, secure loans from banks, etc.

Increasing disagreements and ultimate denial to work together may lead to the dissolution of a partnership. A company, however, enjoys perpetual succession. People may come and go but a company remains unless its wound up.

There are multiple advantages of a partnership over a company as well:

The lack of formality associated with running a partnership compared to running the management of a company allows. s faster processes and decision making. The accounting process is comparatively easier for partnerships. A partnership isn't required to maintain a number of statutory books like companies. As easy it is to form a partnership, it is also comparatively easy to get out of it. A partnership can be dissolved upon the exit of a partner. A company has perpetual succession and hence, it needs to be wound up through legal procedures with due compliance with the requirements.

It is easy to start a partnership than a company. It is easier to register for self-assessment and for business partnership taxation. A company has to be registered as a company.

The flow of knowledge between partners and subsequent decision making is easier than a company for partners do not need to get strategic decisions approved by shareholders.

Ans. b.

The process of conversion can be described as an aggregate of ordered steps:

1. A meeting must be held to take the approval of the majority of partners and to subsequently authorize a couple of partners or more for the execution of paperwork, documents, etc for the registration of the Partnership firm.

2. All necessary documents must be collected such as a list of names and relevant details of partners of the firm, a list of names, addresses, and occupations of all individuals named therein as members with details of shares held by them, a list of details of all individuals who are proposed as the first directors, a statement of assets and liabilities of the Limited Liability Partnership, a copy of latest income tax return, written consent of the partners, etc, as required by the law.

3. Once written approval is taken, an advertisement has to be submitted to a daily newspaper notifying the conversion.

4. Written consent must also be taken on the appointment of directors. The consent of creditors, if any, must also be obtained.

5. An affidavit guaranteeing compliance to all acts and regulations must be submitted.

6. Other legal steps may follow as prescribed by the country-specific corporate law.