limited liability partnership (LLP) registration process
LLP means Limited Liability Partnership, is an alternative business vehicle to carry out business which combines the characteristics of a private company and a partnership firm. Limited Liability Partnership (LLP) formation provides limited liability company status to its partners and offers the flexibility of internal arrangement through an LLP agreement between the partners. This limited liability registration (LLP) process combination will give entrepreneurs and businessmen a more structured business vehicle compared to a sole proprietorship or a conventional partnership. LLP registration process provides the flexibility of controlling the business operation in accordance with the partnership agreement whilst enjoying the limited liability status compared to a company which is subject to strict MCA compliance requirements under the Companies Act 2013 in most of its affairs. The major advantage of setting up a Limited Liability Partnership (LLP) in India is that it has a separate legal entity from its partners and combines the advantages of both the Company and Partnership into a single form of organization. In Limited Liability Partnership (LLP) registration, one partner is not responsible or liable for another partner’s misconduct or negligence; this is an important difference from that of a unlimited partnership.
Formation of a Limited Liability Partnership (LLP) online offers simple and flexible procedures in terms of formation and management and has less number of compliances in comparison to other entities. In an LLP, all partners have a form of limited liability for each individual’s protection within the partnership, similar to that of the shareholders of a corporation.
Limited Liability Partnership is managed as per the LLP Agreement, however in the absence of such agreement the LLP would be governed by the framework provided under Limited Liability Partnership Act, 2008. Limited Liability Partnership registration (LLP) process is less complex than other form of business.
Salient Features Of Limited Liablity Partnership (LLP)
- LLP is treated as body corporate and has separate legal identity from its partners (separate legal entity).
- LLP has perpetual succession just like a company.
- Rights and liabilities of LLP will not change consequently in change of relations between the partners.
- LLP in its own name can hold properties and enter into contracts.
- Partners liability is limited to the agreed contribution.
Documents Required For Limited Liability Partnership (LLP) Registration
Passport size Photograph
Copy of PAN card
Address Proof (Bank Statement/Mobile Bill/Telephone Bill)
For Registered Office
Copy of Electricity Bill
Sale Deed (if owned)
Copy of rent agreement (if rented)
Procedure For Registration Of Limited Liability Partnership (LLP)
1.Firstly e-form named LLP-RUN is filed with the Ministry of Corporate Affairs (MCA) for name approval. Maximum 2 names can be given in the form. The form is approved by the central registration centre (CRC)
within 2-3 working days.
2.As soon as the name gets approved than e form named FiLLipe is filed for the incorporation of the LLP with the following attachments:
- PAN and Aadhar Card of all the partners and Designated Partners
- Consent to act as Designated Partners or partner
- Subscriber sheet
- Address Proof (Bank Statement/Mobile Bill/Telephone Bill)
- Copy of Rent agreement (if rented)
- If owned by others than NOC
This form usually gets approved within 7-8 working days.
3.Once the LLP gets incorporated, a LLP agreement needs to be drafted and duly notarized has to be filed within 30 days of the incorporation in e-form LLP-3.
Mandatory Requirements For Limited Liability Partnership (LLP) Registration online
- DPIN and DSC of all the Designated partners and other partners
- Minimum 2 Designated Partners
- There should be some amount as contribution
- Atleast one Indian resident Designated Partner out of two.
- Registered office address in India
- Execution of LLP agreement between the partners
Mandatory Compliances Of A Limited Liability Partnership (LLP) Every Year
- Form 8- Statement of accounts on or before 30th, October every year
- Form 11-Annual return on or before 31st, march every year
- Statutory audit by a chartered accountant above turnover Rs 40 lac or contribution Rs 25 lac
- Filing of ITR
FAQ’S of limited liability partnership
Q1. What is LLP?
Ans: LLP stands for Limited liability Partnership. It encompasses and merge the benefit and features of both the Company and Partnership Firm. Like Company its partners are having limited Liability and like partnership firm it is carried out by its partner. The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its name.
Q2. What is LLP Company in India?
Ans: LLP in India refers to the Refers to those LLP which are incorporated in India under Limited Liability Partnership Act 2008. Foreign investor plan to open an LLP in India are required to seek governmental approval before investing in India. Some approvals are automatic, - RBI Approvals - though application is required for those approvals. Some approvals are automatic and some require FIPB approval.
Q 3. What is LLP Registration?
Ans: LLP registration refers to the process of incorporation of LLP. Incorporation of LLP is done online using Form Fillip which is available on website of mca. Thus, it is the process of bringing the LLP into existence.
Q4. What is llp registration in India?
Ans: LLP registration in India refers to the process of Incorporation of LLP in India. It takes place when two designated partners in India decide to incorporate LLP. LLP is incorporated filling Fillip Form which is available on website of mca.
Q5. Which is better, LLP or Pvt ltd company?
Ans: Pvt. Ltd Company is company with the following features:
- Having minimum of two members and maximum 200 members with liability
- Having perpetual succession and common seal
- Cannot issue its shares to the public
On the other hand a LLP is a partnership with limited liability. It is a combination of Company and Partnership and is governed by a separate act and terms are mentioned in a agreement which are flexible as compared to rigid rules and regulations of the companies act, 2013.
Thus in my opinion LLP is easy to incorporate as it requires less compliance than Pvt. Ltd Company.
Q6. How to incorporate LLP?
Ans. LLP is incorporated online using Fillip Form which available on internet to with two designated partner. Minimum two designated partner are required to incorporate LLP.
Q7. How to close LLP?
Ans. LLP can be closed online. Form 24 is used for the closure of LLP. This form is available online on mca.
Step 1: Cease Commercial Activity
Step 2: Close Bank Account(s)
Step 3: Prepare Affidavits & Declaration
Step 4: Prepare Documents
Step 5: File Any Pending Documents.
Step 6: Obtain Chartered Accountant Certificate.
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