LLP Registration
Advantages
- Minimum Two Partners
- DIN of the Partners
- No Minimum Capital required
- DSC of one of the Partner
- One Partner shall be Indian resident
Minimum Requirements
- Limited Liability Protection
- No requirement of Audit
- Lower Registration Cost
- Separate Legal Entity
- Less Procedural Compliances
Meaning of LLP
A limited liability partnership (LLP) is a type of partnership that allows a few or all partners (contingent upon the jurisdiction) to have certain defined liabilities. This signifies the liability of each partner towards the misconduct or negligence of another partner.
LLP is one of the easiest types of businesses to incorporate & manage and it integrates the advantages of a Partnership Firm and a Company.
Key Takeaways
- Limited liability partnerships (LLPs) form a partnership design in which each partner has a limited liability proportional to the investment they have made in the business.
- LLP disperse the risk among the partners, leverage the individual abilities & competencies and form division of labor pattern
- LLP is a common trend among professional businesses such as legal firms, wealth managers and Accounting consultancies.
Origin of concept
The concept of a limited liability partnership was introduced in India by the Limited Liability Partnership Act 2008.
The main reason behind the introduction of Limited Liability Partnership is to furnish such a form of business entity that is less complex in nature, easy to maintain, and pertains limited liability to its owners. Besides, an LLP offers non-rigidity of partnership and restricted liability of a company.
Suitability and Popularity
LLPs are most-popular among the Professionals and Closely held businesses that are family-owned. It is not suitable for those kinds of businesses who have plans to raise equity funds from Venture Capitalist, Angel Investors or Private Equity Funds.
Features of LLP Company
- It has a separate legal entity like companies
- The liability of each partner is limited to the contribution made by them.
- The cost of forming and running LLP is low compared to companies.
- Less compliance and regulations
- No requirement of minimum capital contribution
- Compulsory Audit is required only when the Contribution exceeds 25 lakhs or the Annual Turnover exceeds 40 Lakhs.
Basic Requirements to Incorporate an LLP
- Minimum 2 Designated Partners
- Digital Signature of one Designated Partners
- DPIN of all the Partners
- The Contribution (tangible or intangible property or other benefits to the Limited Liability Partnership)
- At least one designated partner is Indian Resident
Documents Required for LLP Registration in Jaipur
The LLP Act, 2008 has listed following requirements for incorporation of LLP
For Partners
- PAN Card or Passport (for Foreigners)
- Driving license or Aadhar card, residence card or election identity card, or other government-issued identity documents.
- Telephone Bill or Bank Statement not older than 3 months
Registered Office Proof
- The landlord provide proof of objection to the name on the gas or electricity bill or the property tax receipt or water bill or sales note in order to use the premises as its registered office.
- Documentary evidence of any utilities, such as gas, electricity, telephone, etc., clearly indicating the address or document of the premises in the name of the owner (not older than two months).
Registration Process of Limited Liability Partnership
The Ministry of Corporate Affairs vides its notification dated 18th February 2020 effective from 23rd February 2020 has further amended the Companies (Incorporation) Rules, 2014 thereby substituting the old Form INC-32 (SPICe) with web service SPICe+ along with certain other amendments.
- Name Application Through Run On MCA Portal
The first step is to make an application for reservation of name which shall be reserved by using the web services (RUN LLP) available at www.mca.gov.in along with the specified fees. Two proposed LLP names (along with their justification) are applied online via RUN LLP form on the MCA portal.
Before applying for a name, kindly check that the name is available on MCA as well as no trademark if there is no such name under the Class of work you are going to apply for Click on the below-given link to check: Trademark Registration. Once the name is allotted by the Ministry, it is reserved for a period of 20 days from date of approval.
- Obtaining DSC
Before initiating the process of registration, you must apply for class 2 digital signatures of the designated partners of the proposed LLP. This is due to the fact that all LLP documents are submitted online and must be digitally signed.
- E-Filing for Registration of LLP
Form FiLLiP is the application form for the incorporation of the LLP. FiLLiP is an integrated form that offers a number of services, namely allotment of DIN, Reservation of Name and Incorporation of LLPs.The application for incorporation of LLP shall be accompanied with documents like subscriber’s sheet, directors KYC, consent form and registered office address proof. The e-form has to be digitally signed by one of the partner of LLP through their DSC and certified by the practicing professional (CA/CS/CWA).
- Certificate of Incorporation
Once the E-Form FiLLiP is approved by the Ministry, the Certificate of Incorporation is provided via E-mail.
- Filing of LLP Agreement
LLP Partnerships is a new and convenient concept that does not require any minimum capital. Besides, the registration cost is reasonable.
If you wish to commence your business with Limited Liability Partnership, then it is very important to get it registered under Limited liability Partnership Act, 2008.
One must get its business registered as a Limited Liability Partnership using the legal registration services from professionals who can take on the responsibility for your taxes and commercial compliances.
FAQs on Private Limited Company
Who can become Partners to the Limited Liability Partnership?
Yes, for small business it is preferable to register under private limited company registration in India. It provides them the credibility and a image of their business in the eye of financial institution, suppliers & potential clients. It helps the company in obtaining the loans at little compliance from the banks or potential clients while entering into any deal.
What are the documents required for forming an Limited Liability Partnership?
An approved name shall be valid for a period of 20 days from the date of approval of such name
What is the minimum capital requirement for incorporating Limited Liability Partnership?
A private limited company must have minimum 2 directors and can have a maximum of 15 directors and a minimum of 2 shareholders are required maximum number of shareholders is 200.
What are the minimum requirements of becoming a Partner in Limited Liability Partnership ?
Yes, a person can become a Director as well as a shareholder and vice versa as a Company is a Separate Legal Entity.
What are the criteria's of getting the accounts of Limited Liability Partnership audited by an auditor?
As per Companies Act, 2013 there is no minimum capital required for incorporating a Private Limited Company but generally people prefer and advised to incorporate the same with a minimum capital of INR. 1 Lacs.
Is it possible to convert a Limited Liability Partnership into a Company or Partnership Firm?
Yes, a NRI or a Foreign National can become a shareholder and Director (post obtaining the Director Identification Number). However one Director of the Company should be Indian Resident.
How much stamp duty is to be paid for drafting of Limited Liability Partnership?
A Member who has agreed to subscribe the shares shall be required to deposit the money in the bank account at the earliest and shall file a form for commencement within 180 days from the date of incorporation of the Company.
Can Foreign National or a NRI become of Designated Partner in a Limited Liability Partnership?
No, the money deposited cannot be withdrawn but the same can be used by the Company for its official purpose like for paying salary to staff members and employees, other administrative expenses etc