Limited Liability Partnership
Simplicity in the registration process and easy to maintain with lesser compliance has made LLP a preferred entity over traditional partnership by Small and Medium businesses especially by IT and Professional firms, as it's easy to set up and has simple compliance and reporting structure.
LLP is governed by the Limited Liability Partnership Act, 2008, and is incorporated with the Ministry of Corporate Affairs. The main characteristic of LLP is limited liability of partners, the liability of partners in LLP is limited to the extent of unpaid capital, and no partner is liable for misconduct or unlawful action of other partners in LLP. The common interest ground for all partners is specified in an agreement known as the LLP agreement. LLP agreement specifies the business to be pursued, address of the registered office, partner details, and other clauses as agreed by mutual agreement of partners and certain clauses specified by the Act.
Why to choose LLP?
Legal Entity
LLP is established under the act, thus it has separate legal status and can enter in to contract in its own name. Partners of the LLP are not liable for the debts of the firm.
Perpetual Succession
As in the case of a company, LLP too has similar legal status and is dissolved only by way of legal procedures. Thus, even if the partners are deceased or departed LLP is in existence in the eyes of law.
Lesser Compliance
LLP has lesser compliance to fulfill. It does not compulsorily require under the statute to conduct an audit as in the case of the company unless certain conditions or situations are triggered. LLP requires audit only if:
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Its turnover exceeds 40 lakhs
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Its capital contribution exceeds 25 lakhs
Transferring Ownership
LLP has lesser compliance to fulfill. It does not compulsorily require under the statute to conduct an audit as in the case of the company unless certain conditions or situations are triggered. LLP requires audit only if:
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Its turnover exceeds 40 lakhs
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Its capital contribution exceeds 25 lakhs
Minimum Capital
Like a company, LLP can be formed with a capital contribution as low as Rs.1,000/-. Thus there isn't any compulsion on minimum capital requirement.
Multiple Role
There isn't any restriction on the relationship of the partner with LLP. A partner can be a lender or creditor or even an employee. A partner can enter into contract with LLP in different capacities.
Process for Registering LLP
Digital Signature Certificate
Apply for digital signature for proposed Partners
Obtain DPIN
DPIN (Designated Partner Identification Number) is to be obtained for proposed designated partner
Reserve Unique Name
Reserve Unique LLP name using RUN services with the Ministry of Corporate Affairs. Click here to check name availability
Drafting LLP Agreement
Drafting LLP agreement for the proposed LLP for specifying objective, registered address and other rules of the LLP
Form FiLLip
Filing all the documents, Agreement with Registrar of companies along with prescribed fees, on approval LLP Certificate will be issued
PAN/TAN
Applying for PAN / TAN for LLP
Documents required for Registering LLP
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Photograph of all the Partners
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PAN & AADHAAR of all the partners
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Address proof of partners (Driving License/Passport/Voter ID)
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Address proof of registered office:
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Rental Property: Rent Agreement
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Owned Property: Sale deed
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Consented property: NOC of a landlord/owner and Electricity bill or any other utility bill for the address proof of the registered office of the LLP. (Not older than 2 months)
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Details required for Registering LLP
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Email ID and Contact number of all partners and LLP
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Qualification of Partners
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Place of Birth of Partners.
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Proposed Name of LLP. (Check Name availability here)
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Nature of business
Other Requisites:
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Must have a registered office in India.