WHAT IS LIMITED LIABILITY PARTNERSHIP?

Limited Liability Partnerships, LLP is a unique and new form of business that combines the advantages of both ‘Company’ and ‘Partnership’ in a single business entity. This was introduced in India in 2008 with the approval of the Limited Liability Partnership Act, 2008.

LLP is a superior type of partnership. A normal partnership is often discouraged due to its unlimited liability feature, i.e. your personal assets may be seized in case all the dues are not cleared. To counter this problem, an important feature of limited liability of company was added to the partnership, resulting in Limited Liability Partnership.

LLP is a separate legal entity, which can be formed in India by a minimum of two persons coming together with a motive of earning profit. Unlike a Private Ltd Company, an LLP is easy to manage and it is subjected to minimal post registration compliances.

LLP REGISTRATION PROCESS IN INDIA

STEP 1: APPLY FOR DIGITAL SIGNATURE CERTIFICATE (DSC)

The LLP registration process starts with the application to obtain DSC for all Proposed Designated Partners. These digital signatures (DSC) will be taken in use to file the LLP registration, ROC compliance forms, and Tax returns.

STEP 2: NAME APPROVAL

File for Name Approval form to ROC through LLP RUN (Reserve Unique Name) facility available on the MCA portal.

Maximum two names can be applied through this method. It takes a maximum of three working days to get name approval from the Registrar of LLP.

STEP 3: FILING OF INCORPORATION APPLICATION

After successful name approval of the LLP, incorporating application is required to be filed in e-Form FiLLiP. Fees for LLP registration is mentioned at the MCA website.

The Incorporation application consists details of the proposed designated Partners and all the supporting documents as attachments.

It is filed with the registrar who has jurisdiction over the state in which the registered office of the LLP is situated.

STEP 4: FILE LIMITED LIABILITY PARTNERSHIP AGREEMENT

An applicant is required to submit a duly notarized partnership agreement in Form-3 on the MCA portal within 30 days of incorporation. This step is taken after the completion of LLP registration and receipt of Certificate of Registration from MCA.

STEP 5: FILE PAN APPLICATION

As the LLP registration procedure is completed, the applicants need to file the PAN Application for the newly registered LLP and provide with all the details and relevant documents.

As per the recent amendment, a new form has been introduced named as AGILE (INC-35). This form is accompanied with the SPICe form.

Submission of this form will provide registration of EPFO (Employees Provident Fund Organization), ESIC (Employee State Insurance Corporation) and GST for the company.

STEP 6: OPEN BANK ACCOUNT

Open LLP’s Bank Account to start a financial transaction.

BENEFITS

1: SEPARATE LEGAL ENTITY

A LLP is a legal entity and a juristic person established under the Act. The partners are distinct from the entity and both can sue each other and get sued in the process.

2: AUDIT NOT REQUIRED

Entrepreneurs earning a turnover of less than 40 Lakhs and capital contribution of less than 25 Lakh need not get their accounts audited. Therefore, LLPs are ideal for startups and small businesses that are just starting their operations and want to have minimal regulatory compliance related formalities.

3: EASY TRANSFERABILITY

The ownership of a LLP can be easily transferred to another person. All you need is to induct them as a Designated Partner of the LLP. LLP is a separate legal entity separate from its Managing Partners, so by changing the Managing Partners, the ownership of the LLP can be changed.

4: LIMITED LIABILITY

The biggest advantage is Limited Liability, which means the status of being legally responsible only to a limited amount for debts of a LLP. Unlike proprietorships and partnerships, in a LLP the liability of the members in respect of the LLP’s debts is limited. The personal assets of the directors are safe if the company goes bankrupt. So it’s entirely a win –win situation for you if you plan to step to head forward with a Suffix LLP.

5: LOWER COMPLIANCE REQUIREMENT

A Key benefit of registering an LLP over a private company is lesser compliance requirement.it doesn’t have a mandatory audit requirement until a certain level of turnover or Contribution. Compliance related to Board Meeting & Statutory Meetings do not apply to LLP.

Get a free consultation for LLP registration by scheduling an appointment with Legal Time.

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REQUIREMENTS

MINIMUM TWO DESIGNATED PARTNERS

Minimum one Designated Partner must be an Indian resident.

ONE INDIAN PARTNER

DPIN (Designated Partners Identification Number) for all Designated Partners

DPIN

DSC (Digital Signature Certificate) for all the Designated Partners

DSC

Address proof for the registered office. (Office can be either a commercial or residential place)

REGISTERED OFFICE

DOCUMENTS REQUIRED

PAN CARD

Pan Card of Shareholders & Directors

Foreign Directors must provide a valid Passport notarized or apostilled

PHOTOGRAPH

Latest Passport size photograph of all Designated Partners.

IDENTITY PROOF

Aadhar Card/ Voter ID/Passport/ Driving Licence of all Designated Partners.

ADDRESS PROOF

Latest Telephone Bill /Electricity Bill/ Bank Account Statement of all Designated Partners.

FOR REGISTERED OFFICE

Rent agreement

Utility bills-telephone, electricity, and municipal (Not older than 2 Months)

NOC From Owner.

POST LLP REGISTRATION REQUIREMENTS?

Trademark/Patent Registration

Trademark and Patent gives protection from infringement and duplication. With this, competitors cannot affect your brand and market value. The logo provides protection under the Trade Marks Act 1999

GST Registration

GST (Goods and Service Tax) registration is required for Business with annual turnover exceeds Rs. 40 Lakhs (Rs 20 Lakhs for Northeast states).GST registration is mandatory for particular businesses like Export-Import, E-commerce, and Market Place Aggregator.

Get a free consultation for LLP registration by scheduling an appointment with Team Expert.

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