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Starting Limited Liability Partnership Firm
Llp Deed Writing And Gst Registration.
LLP Registration in India
- LLP Advantages: LLPs offer a modern business structure combining partnership flexibility with limited liability protection, providing entrepreneurs with a secure platform for collaboration.
- Filing Champs Assistance: Filing Champs simplifies LLP registration in India, guiding businesses through the process to ensure compliance with requirements.
- Specialist Support: Our team of experts assists with the online registration process, offering step-by-step guidance for a quick and cost-effective LLP registration.
- Ease of Registration: Contacting Filing Champs enables businesses to swiftly initiate LLP registration, paving the way for a promising future in the business landscape.
What is an LLP?
- Definition of LLP: An LLP is a distinctive business structure blending partnership and company traits. Partners enjoy limited liability akin to shareholders in a corporation, along with the flexibility and simplicity of a partnership.
- Legal Character: LLPs have an independent legal identity, enabling them to undertake legal actions separately from their partners. This structure safeguards partners’ assets and simplifies legal procedures.
- Popularity and Oversight: LLPs have become popular among entrepreneurs due to asset protection and reduced legal obligations compared to regular corporations. Introduced in India in 2008, LLPs are regulated by the Limited Liability Partnership Act, offering a reliable and adaptable option for businesses of all sizes.
Requirements and Eligibility for LLP Registration
To qualify for the registration of an LLP firm in India, you must meet the following criteria:
- Minimum Partners: Forming an LLP in India necessitates a minimum of two partners, with no maximum limit.
- Designated Partners: The LLP must have at least two designated partners, who must be natural persons. Additionally, one designated partner must be a resident of India.
- Nomination for Corporate Partner: If a corporation becomes a partner, a natural person must be nominated to act as its representative.
- Agreed Contribution: Each partner is required to contribute the LLP’s shared capital as per the agreed-upon terms.
- Minimum Authorized Capital: The LLP must have a minimum authorized capital of Rs. 1 lakh.
- Indian Resident Designated Partner: At least one designated partner of the LLP must be a resident of India.
By meeting these requirements, you can register an LLP in India and enjoy its benefits.
Attributes of Limited Liability Partnerships (LLPs)
- Legal Personality: Similar to a corporation, an LLP possesses its own legal identity, separate from its partners. This grants the LLP distinct rights and obligations.
- Minimum Two Partners: Formation of an LLP requires at least two individuals, facilitating collaboration in establishing and running the business.
- Unlimited Partner Capacity: Unlike other business structures, LLPs have no maximum limit on the number of partners, allowing for easy expansion and inclusion of new partners.
- Two Designated Partners: An LLP must have at least two designated partners, who must be real individuals, with at least one residing in India.
- Limited Liability: LLPs offer partners limited liability, protecting personal assets from business liabilities, thus reducing financial risk.
- Cost-Effective Startup: Establishing an LLP is more economical compared to larger corporations, making it an attractive option for small businesses.
- Fewer Regulatory Requirements: LLPs have fewer rules and regulations to adhere to compared to large corporations, resulting in less paperwork and reduced administrative burden.
- No Minimum Capital Requirement: Unlike large corporations, LLPs do not require a specific amount of capital for formation, allowing partners to invest according to their means.
Advantages of Limited Liability Partnerships (LLPs)
The benefits of a Limited Liability Partnership (LLP) are discussed in depth below:
- Legal Identity: Similar to large corporations, LLPs possess their own legal identity, enabling them to undertake legal actions independently, which builds trust and cooperation.
- Limited Risk for Partners: LLP partners have limited liability, being responsible only for their contributions. They are not liable for the debts or losses beyond their investment, preserving their reputation.
- Cost and Time Savings: Setting up an LLP is cost-effective and involves fewer regulations compared to large corporations. Over time, the amount of paperwork required diminishes, saving both money and time.
- Flexible Capital Requirement: Establishing an LLP doesn’t require significant capital. Partners can contribute varying amounts according to their preferences, offering flexibility in financial investment.
Disadvantages of Limited Liability Partnerships (LLPs)
Certainly, Limited Liability Partnerships (LLPs) have significant benefits, despite a few inherent disadvantages:
- Penalties for Non-Compliance: LLPs have fewer regulatory requirements, but failure to adhere to them can result in significant fines. Even if an LLP remains inactive for a year, it must inform the government or face penalties.
- Closure Requirements: An LLP must have at least two partners to operate. If it falls below this threshold for six months, it must cease operations. Additionally, if an LLP cannot meet its debt obligations, it may be compelled to shut down.
- Limited Access to Capital: Unlike large corporations where investors can become owners by investing money, LLPs do not operate in the same manner. This makes it challenging for LLPs to raise substantial funds from investors.
Naming Guidelines for LLPs
- Unique Name Selection: Pick a unique name that isn’t already taken by other businesses. This streamlines the approval process and establishes your distinct identity.
- Clarity in Name: Incorporate descriptive words that clearly convey your company’s activities. This helps individuals understand your services or products more easily.
- Inclusion of Business Structure: Ensure that your LLP’s name ends with “LLP” or “Limited Liability Partnership.” This is mandatory to indicate your business structure.
Documents Required for LLP Registration
To begin the registration process for an LLP, partners must provide the following documents:
- PAN Card/ID Proof of Partners: Partners need to provide their PAN card or any valid ID proof such as voter’s ID, passport, driver’s license, or Aadhar card.
- Address Proof for Partners: Partners must submit an address proof which may include documents like a voter’s ID, passport, driver’s license, Aadhar card, or any recent utility bill like electricity, water, or gas bill from the last 2-3 months.
- Residence Proof of Partners: Partners should furnish recent documents confirming their residence, such as a bank statement, phone bill, mobile bill, energy bill, or gas bill from the last 2-3 months.
- Passport-size Photograph: Partners are required to provide a passport-sized photograph with a white background.
- For Foreign Nationals and NRIs: Foreign nationals and NRIs intending to partner in an Indian LLP must submit their passport along with address proof like a driver’s license, bank statement, residence card, or any government-issued identity proof containing their address.
- Proof of Registered Office Address: This includes a copy of the landlord’s rent agreement and a no-objection certificate if the office space is rented. Additionally, a recent utility bill (gas, electricity, or telephone) with the complete address and owner’s name dated within the last two months should be provided.
- Digital Signature Certificate (DSC): At least one designated partner must possess a Digital Signature Certificate (DSC) for digitally signing documents.
Procedure for LLP Registration
The process of forming an LLP consists of several critical steps. Here is a thorough guide for incorporating your LLP:
- Obtain Digital Signature Certificate (DSC): All proposed LLP partners need to acquire a Digital Signature Certificate (DSC) since digital signatures are mandatory for government filings.
- Obtain Director Identification Number (DIN): Partners lacking a DIN must apply for one. DIN is a unique identification number granted to individuals aspiring to become directors or designated partners in LLPs.
- Choose a Name for the LLP: Select a unique and suitable name for your LLP, adhering to Ministry of Corporate Affairs regulations.
- Form for Incorporation of LLP (FiLLiP): Fill out the FiLLiP form with essential information regarding the proposed LLP, its partners, LLP agreement, and registered office address. Partners must declare their agreement to act as designated partners and comply with LLP regulations.
- Draft LLP Agreement: Create an LLP agreement outlining each partner’s rights, duties, and obligations. This agreement must be notarized and submitted to the Ministry of Corporate Affairs within 30 days of incorporation.
- Obtain Certificate of Incorporation: After filing and validating the necessary forms and paperwork, the Registrar of Companies (RoC) will issue the Certificate of Incorporation, officially recognizing the LLP’s establishment.
- Apply for PAN and TAN: Once you have the Certificate of Incorporation, apply for the LLP’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
By diligently following these steps, you can successfully register your LLP and embark on your entrepreneurial journey.
Simplified LLP Registration Services Offered by Filing Champs
Filing Champs assists you throughout the LLP registration process, offering valuable support and guidance.
- Expert Guidance: Our experienced team ensures you comprehend every aspect of LLP registration, guiding you through each step accurately.
- Name Reservation: We help verify the availability of your chosen LLP name and reserve it as per the regulations.
- DSCs and DINs Assistance: We aid in obtaining Digital Signature Certificates (DSCs) and Director Identification Numbers (DINs) essential for the process.
- LLP Agreement Preparation: Our experts assist in crafting a legally sound LLP Agreement and handle all documentation filing with precision and compliance.
- PAN and TAN Application Support: We simplify the application process for your LLP’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
- Dedicated Customer Support: Our customer service representatives are available to address any queries, ensuring a seamless journey.
- Timely Updates: You’ll receive regular updates on your LLP registration status, keeping you informed throughout the process.
With Filing Champs by your side, you can navigate LLP registration confidently, benefiting from professional guidance and a hassle-free experience.
Proprietorship vs Partnership vs Limited Liability Partnership (LLP) vs Company
| Features | Proprietorship | Partnership | LLP | Company |
|---|---|---|---|---|
| Definition | Business managed by one person | Agreement between multiple parties | Combination of partnership and company | Registered entity with limited liability |
| Ownership | Sole Ownership | Min 2 Partners, Max 50 Partners | Designated Partners | Min 2 Directors, Min 2 Shareholders, Max 15 Directors, Max 200 Shareholders. For One Person Company: 1 Director, 1 Nominee Director |
| Registration Time | 7-9 working days | – | – | – |
| Promoter Liability | Unlimited Liability | Limited Liability | Limited Liability | Limited Liability |
| Documentation | MSME, GST Registration | Partnership Deed | LLP Deed, Incorporation Certificate | MOA, AOA, Incorporation Certificate |
| Governance | – | Under Partnership Act | Under LLP Act, 2008 | Under Companies Act, 2013 |
| Transferability | Non Transferable | Transferable if registered under ROF | Transferable | Transferable |
| Compliance Requirements | Income tax filing if turnover is more than Rs.2.5 lakhs, ITR 5, Form 11, Form 8 | ITR 5 | ITR 5, ITR 6, MCA filing, Auditor’s appointment | ITR 6, MCA filing, Auditor’s appointment |
LLP Registration FAQ's
At least two individuals aged 18 or above with a valid Indian address or foreign nationals, corporate bodies, or LLPs.
Costs vary based on partners' contributions, stamp duty, and professional charges.
Yes, for LLPs offering goods/services, GST registration and filing are mandatory.
A tool for electronic identification in transactions, mandatory for designated partners.
Unique ID for LLP partners, required for all present or future directors.
Around 14-20 days, subject to document submission and approvals.
Yes, with a DPIN, but one designated partner must be a resident Indian.
Yes, under the automated route with certain restrictions.
Yes, with benefits.
PAN/Passport, identity proof, bank statements, registered office proof, NOC from landlord, utility bills.
Yes, offering advantages of both partnerships and companies.
Filing LLP Annual return, Final Statement of Account and Solvency, Income Tax Return.
No, only partners can contribute; LLPs cannot raise funds from the public.
Registration combining company benefits with partnership flexibility.
LLP offers lower costs, owner control, and fewer compliance obligations.
Online process with document submission.
Minimum two partners required; no maximum limit.
Limited liability protection, flexibility, lower costs, and fewer tax compliances.
Designated partner must be a natural person above 18 years, allowing foreign nationals with at least one Indian designated partner.
No minimum requirement; partners can contribute any amount.
To provide limited liability protection while sharing profits and losses.
LLP is responsible; partners liable only up to their investment.
Minimum two partners required, FDI restrictions, longer formation time, contribution obligations, ownership transfer difficulty, limited borrowing options.
