Limited Liability Partnership is the most preferred business structure in India. Emerging businesses find LLP better than the conventional partnership model. It is because the LLP is much more flexible and ensures minimum liabilities for each serving partner. The minimum liabilities imply that each partner has nothing to do with the misconduct or losses triggered by any associate partner. This is the reason why it is called LLP. Unlike shareholders, partners handle the managerial affairs of the business. Owing to this reason, LLPs are often considered an ideal mix of partnerships and corporations. Read on to find out the legalities around LLP registration in Coimbatore and the paperwork required.
What makes LLP an ideal legal structure?
- LLP does not impose unlimited liability on serving partners. It endorses the notion of limited liability which prevent each partner from addressing losses triggered by another partner. Each partner is only liable to confront losses borne by the company to the extent of their contribution.
- Turning LLP into another legal structure is less complex and cumbersome.
- LLPs with less than Rs 40 Lacs capital contribution does not fall under the auditing requirement.
- The transactions of immovable property can be executed under the name of LLP
- LLP endorses the notion of perpetual existence. It will continue to remain in operation regardless of what happens to the partner(s).
- LLP adheres to an autonomous legal entity from that of the serving partners.
- LLP doesn’t have to deal with dividend tax.
Eligibility Criteria for LLP Registration in Coimbatore
- The applicant partners must have attained the legal age i.e. 18 years
- A minimum of two individuals can pave the foundation of an LLP
- There can be any number of partners
- The capital requirement for founding the LLP is nil except for stamp duty
- One person proposed to be a partner should belong to India
- LLP name should be unique and in line with governing Acts.
Documents for applying for LLP Registration in Coimbatore
Essentially, the applicant must arrange the following two sets of documents for applying for LLP registration in Coimbatore.
Documents of Partners
- Identity proofs as well as PAN cards of all partners.
- Address Proof such as Voter ID, passport, or DL.
- A passport-size photos
- Passports of NRIs intended to be partners in an LLP.
Documents of LLP
- Proof concerning the registered office of address such as rent agreement or property ownership paper.
- Utility bills either gas or electricity bills not older than 2 months
- A Digital Signature Certificate (DSC)
How to secure LLP registration in Coimbatore?
Registering an LLP is not as complicated as other legal structures. For hassle-free registration, carefully follow the listed-below instructions:
Step 1: Secure the Digital Signature Certificate (DSC)
Securing DSC from a recognized agency should be your first step in the LLP registration process. DSC is mandatory for signing e-documents during online registration. Applicants can secure Digital signatures from certified government agencies such as National Informatics Center, IDRBT Certifying Authority, CDAC, NSDL, and E-MUDHRA.
Step 2: Reserving the Name
Name reservation is the second step in the LLP registration process. For this, the applicant needs to visit the MCA portal and use the service called RUN, which stands for Reserve Unique Name. The RUN assures the applicant whether the proposed name is previously registered or not. Also, it clarifies that the whether the proposed name has any offensive element or not. Name reservation shall only come into effect if the proposed name is unregistered and does not contain elements that are against religious belief or governing legislation.
Step 3: Incorporation of LLP
In this step, the applicant must file an incorporation form called FiLLiP with the RoC i.e. Registrar of Companies. The applicant must refer to Annexure A to submit the incorporation fees.
Step 4: File LLP Agreement
This agreement encloses the rights and obligations of the serving partners. Form 3 available on the MCA portal is used for filing an LLP agreement. The applicant must file the agreement within 30 days from the date of incorporation. LLP agreement must be printed on Stamp Paper of the respective jurisdiction.
LLP Vs Partnership Registration: What are the differences?
- LLP adheres to an autonomous entity, and hence it does not bolster the concept of unlimited liabilities. On the contrary, the partnership firm is less stable on the legal front and incurs unlimited liabilities for the partners.
- LLP can have any number of partners. Meanwhile, a partnership firm can have as many as 50 partners.
- LLP registration falls under the ambit of the LLP Act, 2008. Whereas, Partnership-based firm is governed by the Partnership Act 1932.
- Ministry of Corporate Affairs deals with the incorporation of LLPs in India. Whereas, the Registrar of Firms has the right to legalize the partnership firm.
LLP registration in Coimbatore attracts plenty of legalities and paperwork but it is not complex or cumbersome to deal with. It is advisable to pay close attention to the documentation part to avert any nuisance during the incorporation process. You can also approach a professional firm to secure your registration in one go.
Read Our Article: How To Apply For LLP Registration In India