Limited Liability Partnership Registration (LLP India)
Limited liability partnership or LLP is a combination of both partnership and corporation. It has the feature of both these forms. As the name suggests partners have limited liability in the company which means that personal assets of the partners are not used for paying off the debts of the company.
Many entrepreneurs are opting for this business structure. Everyone is liable for their own acts. There are a number of partners in the firm and hence they are not liable or responsible for others misconduct. All limited liability partnership is governed under the limited liability partnership act of 2008. However, in India LLP was introduced in April 2009.
An LLP is a separate legal entity distinct from its owners. It can enter into a contract and acquire property in its name. LLP form is not just prevailing in India. It is also seen in countries like the United Kingdom, Australia etc.
MINIMUM CRITERIA FOR LLP REGISTRATION
- Minimum of 2 partners
- LLP can start its business immediately after the issue of Certificate of Incorporation.
- Registered office in India
- At least one designated partner as an Indian resident in case of involvement of foreign nationals
- DPIN (Designated Partner Identification Number) for all partners.
- DSC for all Partners
- Minor cannot be a partner
FEATURES OF LLP:
- LLP is registered with MCA (Ministry of Corporate Affairs)
- LLP is a body Corporate – It is a body corporate and incorporated under the act, It is a legal entity separate from its partners.
- Perpetual Succession – Unlike a partnership firm, LLP can also continue its existence even after the death, Insolvency or retirement of one or more partners.
- Separate Legal Entity – The entity and partners are distinct from each other.
- Limited Liability – It means the status of being legally responsible, further the liability of each partner is limited to his agreed contribution in the LLP.
- There has to be at least two partners and no limit on the maximum number of partners.
- LLPs are common in Professional business such as Law firms, accounting firms and wealth managers.
PROCESS TO BE FOLLOWED FOR LIMITED LIABILITY PARTNERSHIP REGISTRATION
One needs to follow these steps to start an LLP Registration in India.
- Appoint partners and designated partners
- Obtaining Digital Signature Certificate (DSC)
- Name Application process
- Prepare all legal documents
- Filing of documents electronically
- File Incorporation with ROC
- Apply for DPIN
- Once the incorporation is received, Draft the LLP agreement
- Filing of LLP Agreement with ROC.
- Need to apply for PAN & TAN (Manually / online)
CONCERNS RELATED TO LLP
- LLP is restricted to raise funds from the general public whether it can be with respect to issuing securities or debt.
- In case of any minor changes in the LLP, business alters the LLP agreement and it shall be amended accordingly and the same needs to be filed with ROC.
- LLP cannot take any Individual decision It needs to seek for the confirmation or the approval for the same from the other partner as well.
- As LLP does not hold the concept of Share Capital, It is not allowed to raise any sort of funds from angel Investors or Venture capitalists.
- LLP is incorporated under the LLP Act 2008, wherein it is liable for the mandatory compliances to be taken care of, In case if it fails to file the same within the prescribed / due dates it will be liable for the penalties accordingly.
- LLP is limited or valid until the time period specified in the LLP Agreement or till the period when the partners mutually agree to wind up on the consent of every partner.
- The partners are designated partners are limited to the extent of the amount of capital invested or agreed to be invested as specified in the LLP Agreement.
DOCUMENTS REQUIRED FOR LLP REGISTRATION
KYC requirements of Partners (with self-attestation)
- Latest passport size photo.
- Copy of Pan card of Partners
- Copy of Aadhaar Card
- Copy of Voter Identity card/ driving licence/passport of the partners.
- In case of NRI or foreign national, passport copy has to be notarized at the Indian Embassy of the particular country.
- Notarized utility bill of the particular country where the NRI or foreign national resides.
- Latest bank statement of not less than two months old.
Registered office proof
- Registered office proof of the company stating if the property is rented/ leased.
- Copy of the rental agreement or lease agreement.
- Copy of electricity/water bill (business place)
- In case of own property, copy of sale deed and electricity bill is sufficient
- Copy of no objection certificate from the owner of the property
ADVANTAGES OF LLP Company Registration
- It is convenient
- It is Organized
- It operates based on Agreement
- Easy to Form
- It has a flexible capital structure
- No minimum capital required
- Low registration cost
- No limit on the owners of the business
- Compulsory audits are not required
- Lower compliances
- Exemption of taxes
- Dividend Distribution Tax is not applicable
- Less restriction and compliance
- Partners have limited liability
- Separate Legal entity
- Foreign Direct Investment is smoother.
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