Limited Liability Partnership (LLP) Registration


LLP is a smart choice for professional services firms, and small and medium sized enterprises going for Partnership. Under LLP, two or more partners form a partnership and it is registered as per Limited Liability Partnership Act, 2008

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    Deliverables

    DSC of 2 partners

    DPIN for two partners


    Name reservation for LLP registration

    Drafting of LLP Agreement with respect to objective of your business


    LLP Identification number


    PAN and TAN of your firm

    Free call by our expert about the compliance requirement after LLP registration in India

    LLP Act

    Limited Liability Partnership Act, 2008

    Limited liability partnership (LLP) is an incorporated partnership formed and registered under the limited liability partnership act, 2008(“The Act”) with limited liability and perpetual succession.

    LLP is yet another form of business organization in India. Other being sole proprietorship, partnership, company etc. It is a suitable form of business organization for small and medium enterprises.

    A limited liability partnership (LLP) is a body corporate formed and incorporated under the Limited Liability Partnership Act, 2008. It is a legally separated entity from that of its partner.

    An LLP is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP. Since liability of the partners is limited to their agreed contribution in the LLP, it contains elements of both a corporate structure as well as a partnership firm structure. There is no personal liability of a partner except in the case of a fraud. Moreover, a partner is not responsible or liable for another partner’s misconduct or negligence as there is no joint liability in the case of LLP.

    Features

    The Main Features of LLP

    LLP is a body corporate and legal entity separate from is partners. The LLP has a perpetual succession.

    The right and duties of partners of an LLP and those of the LLP and its partners shall be governed by an agreement between partners or between the LLP and the partners.

    The liability of the partners are limited to their agreed contribution in the LLP which may be tangible or intangible in nature or both tangible and intangible in nature.

    LLP shall maintain annual accounts reflecting true and fair view of its state of affairs. A statement of accounts and solvency shall be filled by every LLP with the register every year.

    The central government has power to investigate the affairs of an LLP, if required, by appointment of competent inspector for the purpose;


    The Indian partnership Act, 1932 shall not be applicable to LLPs

    Every LLP shall have at least two partners and shall also have at least two indviduals as designated partners, of whom at least be resident in India.

    Advantages

    Advantages of Limited Liability Partnership

    Easy to form

    Forming an LLP is an easy process. It is not complicated and time consuming like the process of a company. The minimum amount of fees for incorporating an LLP is Rs 500 and the maximum amount which can be spent is Rs 5600.

    Liability

    The partners of the LLP is having limited liability which means partners are not liable to pay the debts of the company from their personal assets. No partner is responsible for any other partner misbehaves or misconduct.

    Perpetual succession

    The life of the Limited Liability Partnership is not affected by death, retirement or insolvency of the partner. The LLP will get winded up only as per provisions of the act of 2008.

    Management of the company

    All the decisions and various management activities are seen and done by the directors of the company. Shareholders receive very less power as compared to the board of directors.

    Easy transferability of ownership

    There is no restriction upon joining and leaving the LLP. It is easy to admit as a partner and to leave the firm or to easily transfer the ownership on others.

    Taxation

    Yes, it is the benefit of LLP. Limited liability partnership is exempted from various taxes such as dividend distribution tax and minimum alternative tax. The rate of tax on Limited Liability Partnership is less than as compared to the company.

    No compulsory audit required

    Every business has to appoint an auditor for checking the internal management of the company and its accounts. However, in the case of LLP, there is no mandatory audit required. The audit is required only in those cases where the turnover of the company exceeds Rs 40 lakhs and where the contribution exceeds Rs 25 lakhs.

    Disadvantages

    Not covered all states

    Due to various tax benefits and provisions many states restricts the formation of LLP in their states. This leads to a disadvantage as many states don’t allow their entrepreneurs to form this.

    Less credibility

    One of the major demerits of Limited Liability Partnership is that many people do not consider this as a credible business. People still trust more on company or partnerships.

    Partners not consulting

    Partners of the Limited Liability Partnership don’t consult each other in case of decisions and agreement.

    Transfer of interest

    Though interest and ownership can be transferred but it usually takes long procedure. Various formalities are required to comply with the provisions of the act.

    Lack of recognition

    As LLP is introduced in India in 2009 only it is not recognized by all. Due to its less recognition, it leads to hindrance in smooth functioning of the firm. People are not likely to form LLP.

    All you need to know

    LLP Registration, a prime reason why it has evolved is that of its simplicity in a formation and easy maintenance. It helps owners also to limit their liabilities. This is the biggest advantage of an Limited Liability Partnership over a traditional partnership firm.

    Incorporating LLP Company has both Limited Liability features of a Private Limited company and the flexibility of a Partnership firm. No partner is liable on account of unauthorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s misconduct. LLP form of organization is usually preferred by Professionals, Micro and Small businesses that are family owned or closely-held.

    LLP registration procedure is the easiest and transparent process as it has a blend of the benefits of a company and partnership firm namely, limited liability feature of a company and the flexibility of a Partnership firm. Procedure of LLP registration is not lengthy as you can file your incorporation form online. Online LLP registration procedure will save you a lot of time and energy. LLP registration process includes following steps:

    1. Get a digital signature (DSC)
    2. Apply for Director Identification Number (DIN)
    3. Get the name of the company approved
    4. Incorporation of LLP
    5. File ‘Limited Liability Partnership Agreement’
    Process

    Steps to register a LLP

    Two or more persons associated for carrying on a lawful business with a view to profit shall subscribe their names to an incorporation document following are the steps to be followed

    Step 1

    Acquire / register DSC

    Step 2

    Application for DIN or DPIN

    All designated partners of the proposed LLP shall obtain “Designated Partner Identification Number (DPIN)”. You need to file e-form DIR-3 in order to obtain DIN or DPIN. In case you already have a DIN (Director Identification Number), the same can be used as a DPIN.
    Step 3

    Incorporate LLP

    Apply for the name of the LLP registered by filling E-form 1

    According to section 15(1), every limited liability partnership shall have either the words “limited liability partnership” or acronym “LLP” as the last word of its name.

    After the name gets approved, the incorporation document shall be filled in Form 2.

    It shall state the name, proposed business, address of the registered office of LLP. It shall further state the name and address of the partners designated partners of the LLP and such other information may be required.

    Step 4

    File LLP Agreement

    After incorporation of LLP, an initial LLP agreement is to be filled within 30 days of incorporation of LLP in form 3.

    Any change in the LLP agreement is also required to notified to the registered of companies.

    Documentation

    Documents Required to Register a Limited Liability Partnership

    1

    PAN Card

    PAN Card of all partners. Foreign nationals may provide passport
    2

    Partners Address Proof

    Voter ID/ Passport/ Driving License / Electricity Bill/ Bank Statement of all Director
    3

    Photograph

    Latest Passport size photograph of all partners
    4

    NOC from owner

    No Objection Certificate to be obtained from the owner of registered office
    5

    Rent Agreement

    Rent Agreement of the registered office should be provided, if any