Limited Liability Partnership

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Limited Liability Partnership

LIMITED LIABILITY PARTNERSHIP REGISTRATION

Mainly different kinds of budding entrepreneurs, Law Firms, Auditing Firms, Financial Advisory Services, Real Estate Agencies, Business Consultancies, and Small and Medium-Sized Businesses opt for a Limited Liability Partnership. The idea of a Limited Liability Partnership is quite convenient which is widely known and accepted. Above all, it comes with the ability to protect the personal assets if in case of any dispute and also give several tax benefits.

FORMATION OF LIMITED LIABILITY PARTNERSHIP

To increase the authenticity and genuineness of your business, getting your company registered is mandatory. A lot of perks come along by Registering a company like, 

    • It works as a shield that protects from other risks and losses and also from personal liability.
    • Efficiently draws more customers Secures bank credits and good investment from solid investors.
    • Comes with a great ability towards liability protection which protects your company’s assets
    • Greater capital contribution and greater stability
    • Enhances the potential to develop big and expand
    • You will be getting a Zero Balance Current Account – sponsored by DBS Bank *

BENEFITS OF LIMITED LIABILITY PARTNERSHIP REGISTRATION

In India, the benefits of a Limited Liability Partnership (LLP) Registration is mentioned below:

    • Limited Liability: The word “limited liability” itself indicates a liability that is limited to the range of capital contributed by each and every member. But this also implies that the personal assets of the partners will not be seized or taken in accounts if in any case of loss or disputes the firm incurs. 
    • Separate Legal Entity: A limited liability partnership firm holds a separate legal entity different from its members.
    • Easy Ownership Transformation: In Limited Liability Partnership the ownership transfer is done easily compare to other kinds of business like a private limited company.
    • Corporate Body:  According to Section 3 of the Limited LLP Act, 2008, a firm should be considered as a corporate body to obtaining LLP registration.
    • Perpetual Succession: A Limited Liability Partnership (LLP) has a feature of perpetual succession, which indicates the admission of a new member and departure of an existing member will not hold any effect on the existence of an LLP firm.
    • No Minimum Capital Requirement: Two people without any amount in their pocket can easily start an LLP firm that, as no minimum capital requirement has been mentioned under the act regarding the incorporation of an LLP firm.
    • LLP Agreement: Limited Liability Partnership agreement is a printed stamp paper rightfully signed by all the partners. This agreement outlines the roles, responsibilities, and duties of all partners working in the firm. While decision-making the Limited Liability Partnership agreement plays an important role. 
    • No Audit Requirement: One more vital advantage affixed with the idea of Limited Liability Partnership is that there no audit requirement. Still, In two conditions audit is required which are: a. When the annual turnover surpasses the amount of Rs 40 lakhs or b. when the capital contribution surpasses Rs 25 lakhs.
    • Simple Registration Process: By introducing online registration MCA has simplified the process of obtaining LLP Registration. Through which, all the needed documents can now be filed electronically on the MCA Portal.
    • Easy to wind up: In LLP, not just incorporative the firm but also the procedure of winding up is just a handful of a task. Hence, an LLP firm can easily be wound up in comparison to a Private Limited Company.
Limited Liability Partnership (LLP)

MINIMUM REQUIREMENTS FOR THE REGISTRATION OF AN LLP FIRM

To incorporate an LLP Firm the following listed requirements are to adhere:

    • At least two Designated Partners
    • At least one partner should be an Indian Citizen, Out of all the designated partners. 
    • All the designated partners need to have DIPN (Designated Partner Identification Number) 
    • All the Designated Partners need to have DSC (Digital Signature Certificate)
    • To obtain LLP Registration Address Proof of the Registered Office is a must 

PROCESS OF OBTAINING LLP REGISTRATION

The entire process of obtaining LLP Registration is mentioned below. 

    1.  Filling of the Application for LLP Registration online: An online application form for LLP Registration is needed to be filled by all the nominated partners as well as the designated partners.
    2. Obtaining DPIN and DSC for LLP: To complete the process of LLP Company Registration it is mandatory to have DPIN and DSC. To sign the documents digitally at least one partner must have DSC. To file DIR-3 all the designated partners are mandatorily required to obtain DPIN.
    3. Verification and Name Approval: The partners are required to reserve a unique and fresh name for the company, to obtain LLP Registration. Moreover, the partners are required to file an LLP-RUN form to reserve their desired firm’s name. MCA will reserve your suggested name for 90 days, and if you fail to complete the process of LLP Incorporation within 90 days then the said reservation will stand canceled. Though, it is noteworthy to note that your selected name should not be offensive and already existing in nature. You can only submit maximum two names to the ROC by way of furnishing RUN.
    4. Submission of the documents for LLP Registration: All the required documents are needed to be submitted by designated partners and nominated partners for the registration of LLP, once the ROC approves the name. And the documents include Aadhar Card, PAN Card, Photograph, Address Proof, etc.
    5. Drafting of LLP Agreement: An LLP Agreement should be drafted by the partners which will mention the responsibilities, roles, and duties of all the concerned partners, once all the required documents are submitted properly. The LLP Agreement should be filed within a period of 30days in Form 3 by online or on the MCA portal or at the concerned ROC. 
    6. LLP Registration Certificate:  All the concerned partners are required to apply for the Certificate of registration together with the LLPIN (Limited Liability Partnership Identification Number).

POINTS TO BE CONSIDER BEFORE SELECTING A NAME FOR LLP

The following listed points that must be considered while deciding a name for the concerned LLP:

    • It should be easy to remember
    • It should be simple and short
    • It should be fresh and unique
    • It should be relatable to the activities of a concerned business, i.e., must establish branding and trademark
    • It should directly or indirectly not be offensive to any religion, caste, community, creed, sex, or society
    • It should not be against the Public Policy
    • It should not be clashing to the local/state/central government
    • It should not contain any similarity towards any existing LLP name
    • It should not contain any prohibited word or character
    • It should have prior approval from SEBI, RBI, IRDA if in case the said name includes words like bank, finance, mutual fund, and insurance, etc

REQUIRED DOCUMENTS FOR REGISTRATION OF AN LLP

During The Time Of Incorporation LLP The Partner Need To Provide The Following Documents:
    • All partner’s PAN Card, Aadhar Card, Voter ID, Driving License 
    • Partner’s Address Proof 
    • Partner’s Residence Proof 
    • Partners Photograph 
    • Passport (if in case any of the partners is a Foreign National or an NRI)
Documents Required For Limited Liability Partnership:
    • Registered Office Address Proof 
    • DSC (Digital Signature Certificate)
    • If the Registered Office is on rent then NOC (No-Objection Certificate) from the Landlord. 
    • Utility Bill in the form of electricity bill, a water tax receipt (which should not be older than two months)

FORMS NEEDED TO BE FILED FOR OBTAINING LLP REGISTRATION

The forms that need to be submitted for obtaining registration of an LLP are, 

    • RUN-LLP: The form that is required for name reservation. 
    • FiLLiP: The form which is required for LLP incorporation 
    • Form 5: This form works as a notice in case of a name change 
    • Form 17: An Application form which is needed for converting private limited  into an LLP
    • Form 18: An Application form which is needed for converting of a public limited company into an LLP

POST INCORPORATION COMPLIANCE REQUIREMENTS

There are some requirements the LLP is supposed to fulfill once LLP Company Registration is successfully accomplished. Moreover, this compliance is for one-time, and there is no need to repeat them. The compliances are followed as given below: 

    • LLP Agreement filing 
    • PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) Application
    • New Bank Account in the name of LLP 

ANNUAL COMPLIANCE REQUIREMENTS

There are some compulsory and essential compliance that all the LLP Firm should fulfill even if their business affairs have started or not even, which are:

    • Statement of Account and Solvency
    • LLP Annual Return
    • Income Tax Return

PENALTY PROVISION IN CASE OF NON-COMPLIANCE

    • As per Section 35 of the LLP Act, 2008, the LLP is obliged to file Form 11 with the ROC for Annual Return in a limit of 60 days. And in any case, the filing process is delayed then the penalty of 100 Rupees will be charged on a daily basis. 
    • As per Section 34 of the LLP Act, 2008, the LLP is obliged to file Form 8 for a statement of Account and Solvency in a limit of 60 days. And in any case, the filing process is delayed then the penalty of 100 Rupees will be charged on a daily basis. 
    • The LLP is obligated to file an income tax return (ITR) in ITR 5. And in any case, the filing process is delayed then the penalty will be charged.

Our Packages

Small

8699
  • All expenses and Government fee
  • 2 Class III Digital Signatures (DSC )
  • Name Application under RUN LLP
  • Certificate of Incorporation
  • PAN Number
  • TAN Number
  • LLP Identification Number
  • 2 Director Identification Numbers (DIN)
  • DSC and DIN for additional partners at extra cost
  • LLP Deed Drafting along with franking of Rs. 500/-

Medium

10999
  • All Inclusions from Small Package
  • Tax Registration Application
  • MSME Registration
  • Draft of Bank Account Opening Resolution
  • Draft of Employment offer letter
  • Draft of Employment Contract
  • Draft of Appointment Letter
  • Draft of Website Policy
  • Draft of Disclaimer Policy
  • Draft of NDA
  • 2 Name Application under RUN LLP

Large

29999
  • All Inclusions from Medium Package
  • DSC and DIN for additional partners at extra cost
  • Accounting up to 250 entries in entire FY
  • Annual Compliance filing with MCA for a year
  • ITR filing for first year
  • Tax Return filing (up to 100 Invoices per month) for 12 months
  • DIR-3 KYC for 2 DIN holders

FAQS Limited Liability Partnership

The businesses that are usually involved in Limited Liability Partnership (LLPs) are Law Firms, Auditing Firms, Financial Advisory Services, Real Estate Agencies, and Business Consultancies.
The idea of a Limited Liability Partnership is a combined structure of a Partnership Firm and a Private Limited Company. In India, limited liability is a highly preferred business structure mostly by the budding entrepreneurs as it implants benefits and privileges of both a Private Limited Company and a Partnership firm.

The advantages of the LLP Firm are mentioned below:

    1. Separate Legal Entity
    2. Limited Liability
    3. Easy Ownership Transformation
    4. Involves Low Cost of Incorporation
    5. No Audit Requirement
    6. Adherence to Less Compliances and Regulations
    7. No Audit Requirement
    8. No Set Limit on the Minimum Capital Contribution

The disadvantages or the shortcomings an LLP Firm are listed below:

    1. Inability to raise Venture Capitalist Funding
    2. The pressure of Higher Penalty on Non-Compliance
    3. Huge Income Tax Rate
    4. Incompetent to have Equity Investment
Two partners with the motive to earn profit by doing a lawful business can easily be incorporate LLP. Therefore any individual or business with the motive of non-profit earning business can not form an LLP - Trust, NGO, etc.
Yes, LLP is highly been followed by Law Firms, as the main reason behind is that the LLP is very prominent, which protects your personal assets in case of dispute or insolvency. It also comes with many tax benefits. Hence, most of the law firms have opted for this model after it was introduced in India.

Yes, undoubtedly the concept of LLP is more preferable than a Company. As there are various reasons as to why an LLP is better than a Company.

Yes, as LLP is considered as a separate legal entity Tax applies to it; Tax registration of an LLP is mandatory as it holds it's own unique named PAN card.
NO, to incorporate an LLP you don't need to have any minimum capital. Two people without a simple capital in hand can incorporate LLP YOU There is no prescribed limit of the minimum capital needed to incorporate an LLP. Further, the contribution made by a partner generally consists of tangible or movable and immovable or intangible property or any other benefits to the LLP.

Any individual or a corporate body corporate can become a partner in an LLP (Limited Liability Partnership). Still, any individual who falls under the given below category will not be able to be a partner in LLP:

    1. If a person is declared as unsound by mind by the Court of competent jurisdiction,
    2. If a person is currently insolvent,
    3. He has applied to declare him as an insolvent, and the said application is pending.
No, the audit is not compulsory for all LLP, only for those LLP whose annual turnover surpasses the limit of 40 lakhs and those whose capital contribution passes the limit of 25 lakhs are bound to get their accounts, and financial statements audited.
Yes, obtaining LLP registration is compulsory for an LLP firm.
Yes, for a Limited Liability Partnership firm it is mandatory to get an LLP Registration.
The registrar has absolute power to demand any information, which he may feel is necessary to carry out his duty according to the provisions of the LLP Act 2008 and associated with annual compliance of LLP. And it's a need to carry certain documents concerning the incorporation so that it can be quickly made available for inspection of records by the inspections authorities. The registrar can charge you for every noncompliance of LLP.
A Limited Liability Partnership has to enter/ update the details of all partners can do so through a screen for 'Enter/ Update partners' detail to file LLP agreement'. It is available for the designated partners (as a business partner) after login to the MCA portal.
No, it is not necessary to file form 15 at both the ROC of LLP. You can file at the one ROC and the registrar will process the form and forward the same to the new Registrar for registration. Keep in mind eForm 15 shall not be allowed in case there is any other pending eForm(s). Upon approval, a Certificate for change of registered address from the Registrar office shall be provided.

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