Limited Liability Partnership (LLP)
LLP represents Limited Liability Partnership, and it is controlled by Limited Liability Partnership Act 2008. LLP is usually a separate legal entity that provides the benefit of limited liability to its proprietors as well as flexibleness in partnership. To form a Liability Limited Partnership, at least two individuals required as the designated partners, and it is mandatory that one of the designated partners must be resident of India. LLP is suitable for a small business as it is easy to maintain, cost-effective and has limited liability on the partners. It means that unlike other forms of partnership, in LLP the partners are not jointly responsible for the negligent acts of another partner; the liability is limited to the extent of the capital contribution of the partner. The partners of an LLP have the liberty to operate and manage the LLP according to their will as per the terms described in the LLP Agreement. Many times it is not required to pay the fees for increase/decrease/reduction in the capital because of its flexible capital structure. LLP also offers other cost benefits like no minimum capital requirement, tax benefits, lower compliance costs and a simple incorporation procedure which make it a very useful alternative.
Advantages of LLP Registration in India
The most significant advantage is LLP registration is India is Limited Liability; it means the status of being legally liable only to a limited amount for debts of an LLP. As compared with partnership and proprietorship firms, in LLP the liability of members is limited. The personal assets of the owners are safe if the company goes bankrupt.
Easy Procedure for LLP Registration in India
Forming an LLP in India is effortless. The process is straightforward and does not require any formalities. Usually, it needs the partners to complete a registration form and file it with the local secretary of state. However, the registration may need the partners to write down their roles, responsibilities, financial contributions, and debts distributions.
Limited Liability Partnership is flexible to Manage
LLP in India has the freedom to manage its matters. Within the formation, each partner has the authority to control the LLP and also have the right to choose how much management they would like to run.
It is simpler to become or get away from the partnership of LLP in India. The ownership could be moved to some other person. You need to recruit them being a Designated Partner of the LLP.
Audit requirement not mandatory for Limited Liability Partnership
If Company owners are generating a turnover below 40 Lakhs and a capital contribution of fewer than 25 Lakhs in any fiscal year, then they do not have to get their accounts audited. It gives great comfort to small business owners.
LLP as a legal entity can acquire funds and other properties in its name.LLP is a real person in which all property is vested and controlled.
Documents required for LLP registration in India
– Self-attested copy of PAN card
– ID Proof of Partners (Aadhaar Card/Voter ID)
– Passport size photograph of partners
– Residence Proof of Partners
– Copy of Passport (for Foreign Nationals/ NRIs)
– Address Proof of Registered Office
– Digital Signature Certificate
LLP Registration Process in India
Step # 1: Getting the Digital Signature Certificate (DSC)
Just before starting the entire process of LLP registration in India, you have to make an application for the digital signature of the selected partners of the planned LLP Firm. It is because all of the documents for LLP Firm are submitted online and are needed to be digitally signed.
Within a period of 5 to 7 working days, DSC can be attained for the proposed Partners. If the partners previously have DSC, then this stage can be neglected.
Step # 2: Applying for Director Identification Number (DIN)
You will need to apply the DIN of all of the selected partners or all those planning to be designated partner of the proposed LLP Registration.
The application form for allotment of DIN needs to be filled in Form DIR-3. You need to attach the scanned copy of necessary documents (usually PAN & Aadhaar Card) to the form.
Step# 3: Registration of LLP Name
For LLP Registration in India, partners have to apply for the approval of name of proposed LLP, which should be processed by the Central Registration Centre. We recommend that you should use the MCA portal for searching the availability of names for LLP, which is a free facility on MCA portal. The portal will give the list of closely similar to names of active companies/LLPs depending on the search criteria filled.
It will help in picking names not similar to already active names. The application form can be produced with maximum 2 names in preference order giving their relevance. The registrar will approve the title only when the name isn’t unwanted within the viewpoint of Central Government and doesn’t look like any active partnership firm or an LLP or a trademark etc. If none of the names meets the approval of the MCA, an additional opportunity is given to apply two more titles.
Step# 4: Incorporation of LLP
Right after successful approval of name of LLP, incorporating application must be submitted via e-Form fill up. Information of all the proposed selected partners must fill in as well as the supporting documents should be submitted as attachments. MCA will most likely approve the application form for LLP Registration in 5 to 7 days.
Step# 5: File LLP Agreement
Limited Liability Partnership agreement governs the mutual legal rights and obligations among the partners as well as between LLP and its particular partners.
LLP agreement should be filled out via MCA Portal online in form 3. Form 3 should filed within 30 days of LLP Registration in India.
Step# 6: Apply for PAN, TAN and Bank account :
At the final stage of LLP Registration in India, the partners need to apply for PAN & TAN with the NSDL the firm. After getting PAN and TAN, an application can be submitted for the opening of bank account.
Things to Consider while Selecting Company Name in LLP Registration
The name of the company is significant. It will be the very first impact for your customers, vendors, and stakeholders. It must, thus, be appropriate, effective and attractive. There are several aspects that you ought to bear in mind while doing LLP registration.
Shorter & Simple
The title needs to be short and snappy and never long. Individuals must be able to enunciate it effortlessly plus they must be able to bear in mind your business’ title the very first time they listen to or read it.
The name of your company indeed should be associated with your business. It must fit the company’s branding.
Title of your respective organization shouldn’t be identical or the same as a preexisting organization or brand.
The company name should be finished using the suffix “Pvt. Ltd” while registering Private limited company and “LLP” while Limited Liability Partnership registration.
Shouldn’t be unlawful or offensive
The company name shouldn’t be against the law of the land. It shouldn’t be violent or up against the traditions and philosophy of the religion.