Limited Liability Partnership Registration
Limited Liability Partnership (LLP) is considered as one of the easiest forms of business entity introduced under limited liability partnership act, 2008. LLP full form is limited liability partnership. This form of business entity limits the liabilities of its owners and simple to manage.
This business structure is very popular among professional, micro & small businesses (family owned or closely owned) because of its easy incorporation process & few compliance requirements. Partners in limited liability partnership are not personally liable to the creditors of the company. If any problem occurs, creditors/banks can only sell the assets of the company but not the director’s personal assets.
In this form of business entity, one partner is not responsible for the negligence or misconduct done by another partner. LLP formation is less expensive as compared to private limited company registration. LLP doesn’t have the right to issue equity shares. It is suggested that you should not choose LLP as your business entity in case you are having plans to raise equity fund from venture capitalist, angel investors or private equity funds. In order to apply for LLP registration in India, you need to fill a simple application form & need to submit it online through FinacBooks.
Limited Liability Partnership Act 2008
Limited liability partnership act 2008 is the act introduced by the central government to make provisions for the incorporation and regulations for limited liability partnership in India. LLP is a legal entity separate from its partners. As per LLP act, LLP itself enter into contracts as a separate legal entity. In LLP, accounts audit is mandatory in case turnover of a company in any financial year exceeds Rs.40 lakhs & contribution made by partners exceeds Rs.25 Lakhs.
Eligibility for LLP Registration in India
Checklist for Limited Liability Partnership in India
In order to get eligible for LLP registration under limited liability partnership act 2008, you need to understand and fulfill certain important requirements –
Documents Required For LLP Registration
There are various documents which you need to provide in case of LLP registration. Early & Correct submission of documents leads to fast application approval –
Documents of Partners
Documents of LLP
Important forms in Limited liability partnership in India
Some of the important forms related to Limited liability partnership are as follows –
LLP Formation Procedure in India
In order to form an LLP, you need to follow the following LLP registration/LLP incorporation procedure -
Before applying for LLP registration, you must apply for the DSC’s of all designated partners. You can easily file your application as well as documents online. Designated partners can easily obtain their DSC’s through government certified agencies. The cost of obtaining DSC’s varies depending upon your choice of certified agency.
You must apply DIN for all designated partners or individuals who want to be your partner in the proposed LLP. You need to submit your application via Form DIR-3 and it should be signed by either company secretary or managing director/director/CEO/CFO of the existing company in which you are appointed as a director.
In the third step, you need to file your LLP name via form RUN-LLP which will be processed by the central registration centre but it is recommended that you must search LLP name on the MCA portal before filing it to the central registration centre for processing. Make sure your LLP name should be unique. At the time of search, you will get the list of names which closely resembles to existing companies/LLP.
If the registrar found your LLP name unique and not resembling to any existing firm or LLP, your application for LLP formation will get approved. In case of rejection, form submission must be done by applicant within 15 days of defects rectification.
Form FiLLip is used to file application for LLP incorporation and it is approved by the state registrar after verifying the information along with the documents. You also need to apply for DIN in case you are not having the same. The application shall allow to be made by 2 individuals only and fees to be paid as per annexure “A”. When the proposed LLP name is approved by the registrar, your LLP is incorporated.
LLP agreement is the agreement which contains the mutual rights as well as duties between LLP and its partners and also between the designated partners. You must file your LLP agreement on MCA portal via form 3 online within 30 days from the date of incorporation. LLP agreement needs to be printed on stamp paper and the cost of stamp paper varies among states.
Compliance for LLP Company in India
Every LLP needs to follow the below mentioned compliance requirements –
Post Incorporation Compliances
An LLP is expected to complete the following compliances after LLP registration –
- Partnership agreement filing
- Opening of bank account
- Apply for PAN & TAN
Annual Compliance Requirements
There are many compliance requirements which an LLP needs to fulfill annually –
- Income tax return submission of all partners
- LLP annual return submission
- Statement of accounts and solvency
Factors to be Considered While Choosing Your LLP Name
For every business entity, company name is very important. It is the first impression for your stakeholders, suppliers and the buyers. The company name should be short, attractive and relevant. You need to take care of various factors while choosing a name for your LLP -
Check LLP Name Availability in India
Naming an LLP is often complex and a time consuming process because of several rules & regulations which an applicant needs to follow before naming an LLP. As per Companies act 2013 & LLP act 2018, we have to take that name into consideration which is acceptable and compliant with the rules & regulations of these acts. If you want to search your proposed LLP name to identify that whether the name you have selected or any similar name exists, go to MCA portal and search for the name availability.
Benefits of LLP Company in India
Distinct Legal Entity
A LLP is a separate legal entity established under the Limited Liability Partnership Act 2008. The partners are separate from the entity and can sue each other and get sued in the procedure.
A LLP has interruption free existence or perpetual succession. It is brought to an end by the partner’s mutual agreement. Partners will come and go but an LLP runs continuously.
Audit not needed
In LLP, there is no need to audit accounts of those entrepreneurs who are having a turnover of less than 40 lakhs rupees and capital contribution of less than 25 lakhs rupees. LLPs are best for start-ups and the small businesses that just started their operations and want to have minimal compliance related formalities.
Ownership transferred easily
The LLP ownership can be transferred easily to another person by making him as a partner in LLP. LLP is a legal entity separate from its partners. Therefore, if you change the partners, the ownership of LLP will also change.
The LLP is an artificial judicial person who can enjoy, own and acquire property in its own name. This is totally separate from its partners. As LLP is a going concern, no partner can make any claim upon the property of LLP.
The key advantage of a LLP is its limited liability. It is accountable for limited amount of debts as compared to partnership and proprietory firms. If the company is bankrupt, members are not held responsible for the creditors. Creditors can be paid by selling the assets of the office. Directors’ personal assets are secure in this case.
What is the Right Business Structure for You?
It is not easy to choose right business structure as you need to take many factors into consideration before selecting a business entity. Below table not only helps you in giving information about various business structures for Company Registration. It also helps you in choosing the business structure which suits you the most.
|Private Limited Company||One Person Company||Partnership Firm||Proprietorship Firm|
|Act||Companies Act, 2013||Companies Act, 2013||Indian Partnership Act, 1932||No specified Act|
|Number of members||2 – 200||Only 1||2 – 50||Only 1|
|Separate Legal Entity||Yes||Yes||No||No|
|Statutory Audit||Mandatory||Mandatory||Not mandatory||Not mandatory|
|Foreign Participation||Allowed||Not Allowed||Not Allowed||Not Allowed|
|Know More||Know More||Know More||Know More|
What Is Included In Our Package?
LLP Registration FAQ's
How FinacBooks help in Limited Liability Partnership Registration
FinacBooks is a leading Indian portal providing accounting, finance & taxation services to small businesses. We are having more than 10 years of experience in helping individuals providing Limited Liability Partnership registration at a least possible price. We will guide you through the entire process of LLP registration. To avail the best deals on Limited Liability Partnership registration, kindly call us at 8800221252 or you can also e-mail us at firstname.lastname@example.org
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