Because it combines the advantages of both a partnership firm as well as a company into one type of organisation, LLPs-limited liability partnerships have grown to be favoured by entrepreneurs
LLP-Limited Liability Partnership was implemented in India in 2008. An LLP combines elements of a company as well as a partnership firm. The LLP is governed by the Limited Liability Partnership Act, 2008 in India. An LLP must have at least 2 partners to be incorporated. Nevertheless, there is no upper restriction on how many partners an LLP can have. A minimum of two chosen partners must be persons and at least one of them must have a residence in India amongst some of the partners.
Qualities of Limited Liability Partnership
- Similar to corporations, it has a distinct legal entity.
- Every partner’s liability is only for the amount of their contribution.
- An LLP is created after paying a nominal fee.
- fewer rules and compliance.
- No minimum capital investment is necessary.
Benefits of Limited Liability Partnership
- Separate legal entity Limits on the partners’ liabilities
- Low price and minimal compliance
- No minimum capital contribution is necessary.
- Negative aspects of LLP
- Penalty for failure to comply
- LLP winding up and dissolved
- Trouble in raising money
Mandatory Requirements
- Two partners are required, either individuals or corporations for LLP company registration in India
- One of the minimum two Designated Partners (only persons) must be an Indian citizen.
- Within 30 days of this appointment, obtain the selected partners’ prior written permission on Form LLP 9.
- Each selected partner must have a digital signature certificate plus DPIN (DSC).
- LLP will maintain a registered office at which all notices and correspondence may be received and forwarded.
- The final words of an LLP’s name must be either the phrase “Limited Liability Partnership” or the abbreviation LLP.
Procedure
Obtain a certificate for a digital signature
Obtain a digital signature online by submitting an application to any Indian certifying authority, paying the necessary fees, and providing the required documentation.
- Aadhaar Card
- Photograph
- PAN Card
- Mobile Number
- Email address
Reservation of Name
- Anyone interested in starting an LLP may submit a Form RUN-LLP to the Registrar with the required fee to reserve the name.
- A total of 06 names may be submitted for the prospective LLP’s name reservation.
- When incorporating an LLP, Form RUN LLP must be attached if the name contains any of the following: banking, venture capital, insurance, mutual fund, advocate, stock exchange, CA, CWA, CS, etc. A replica of the in-principle permission from the relevant regulatory body or council should be included as well.
- If approved, the registrar might reserve the name for three months starting from the date of notification.
Application for Limited Liability Partnership Incorporation filed
The following phase is for an limited liability partnership to file an incorporation document in Form FiLLiP* [Form for Incorporation of Limited Liability Partnership] with the Registrar overseeing the State in which the LLP’s registered office is located, together with the required fees as well as the following papers.
If the appointed partner is still a body corporate, a replica of the resolution on the letterhead of that body corporate giving consent to be a partner as in the proposed LLP as well as a replica of the resolution/authorization specifying the name as well as address of the person nominated to act in that capacity must be submitted.
- Proof of the proposed LLP Subscribers Sheet’s registered office address, including permission
- Information on the LLPs and/or companies in which the partner or designated partner would be a director or partner, as well as any regulatory authority’s in-principal permission.
- Authorization of the trademark owner or application for trademark registration from the applicant.
- A copy of the approval is necessary if the proposed name contains any expressions or words which need approval from the federal government.
- In the event of collaboration as well as connection with any foreign country or location, a copy of the responsible authority’s consent is required.
- Identity and Location evidence of two specified partners.
- Copy of a present company’s board resolution or its approval as evidence of no objection.
- Any additional documents that the applicant deems appropriate.
- If a person is to be nominated as a designated partner but does not already have a DPIN, they can apply for one via Form FiLLiP.
- Additionally, a name reservation request can be submitted via Form FiLLiP.
- If Form FiLLiP is found to be flawed or insufficient in any way, the Registrar may contact the applicant for more information. In this situation, the form must be submitted again within 15 days of the Registrar’s notification date. If a flaw continues to exist, the applicant will be given a second chance of 15 days to ratify it.
- The Registrar must provide Form 16- LLP’s incorporation certificate.
Creating an LLP Agreement
- The following considerations should be made while drafting an LLP agreement.
- The agreement must be properly notarized, acknowledged by the Designated Partners and Partners, and witnessed.
- It must also be written on stamp paper with the correct stamp duty value for the state where its registered office is located.
Form-3-Filing of Limited Liability Partnership agreement
- Within 30 days of the date of incorporation or concurrently at the time of filing Form FiLLiP, each LLP must submit information regarding the LLP agreement implemented in Form 3 to the Registrar as well as the required fee as well as the supporting documents: the initial Limited Liability Partnership agreement or any subsequent or amended LLP agreements containing changes; any additional information required.
- Make numerous statutory registration applications.
- The LLP must submit applications for numerous statutory registrations, including the opening of a bank account, the Goods and Service Tax Identification Number (GSTIN), the Employee State Insurance Corporation (ESIC), the Permanent Account Number (PAN), the Employees’ Provident Fund Organization (EPFO), and others, as soon as it is incorporated.
Frequently Asked Questions
Do LLPs need to be registered?
Yes, it is required to register an LLP on the Ministry of Corporate (MCA) web. To be a recognised legal body, an LLP must register under the Limited Liability Partnership (LLP) Act.
What distinguishes a partnership firm from an LLP?
To conduct business, an LLP should be registered under the LLP Act. Under the Partnership Act of 1932, though, registration of a partnership firm is optional. The LLP is a distinct legal entity with the right to own property, bring lawsuits, and be sued. Partnership firms are not allowed to purchase real estate or file lawsuits on behalf of others.
In an LLP, how many chosen partners are necessary?
Each LLP must have a minimum of two designated partners, among whom must be Indian citizens
Conclusion
Everything you require to establish your LLP and prepare it for business is covered by Vakilsearch. Their professionals are knowledgeable about the legislation and have assisted companies just like yours in registering their LLP. Through a straightforward and user-friendly personalised dashboard, you can complete all the steps required to register your LLP. It is entirely online and may be accessed from a desktop or your mobile device using the Vakilsearch app. Within 20 days, you’ll receive your LLP incorporation certificate. Your inquiries can be answered by their team at any time.
