{"id":3177,"date":"2020-02-11T10:52:08","date_gmt":"2020-02-11T10:52:08","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=3177"},"modified":"2024-12-26T17:40:47","modified_gmt":"2024-12-26T12:10:47","slug":"what-are-the-benefits-of-limited-liability-partnership","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/what-are-the-benefits-of-limited-liability-partnership\/","title":{"rendered":"What are the Benefits of Limited Liability Partnership Registration?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">We have seen this new trend emerging between the entrepreneurs, who have started using the term-limited liability partnership  (LLP). Mostly the Lawyers and Chartered Accountants use \u201cLLP\u201d for their firm, for example (AB &amp;CD, LLP). It\u2019s a kind of business format which combines the flexibility of partners and the benefits of limited liability of a company at a very minimal cost of compliance. Here in the blog, we&#8217;ll have a look on, what is LLP, and benefits of <a href=\"https:\/\/corpbiz.io\/llp-registration\"><strong>limited liability partnership Registration<\/strong><\/a>. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-benefits-of-limited-liability-partnership\/#What_is_a_Limited_Liability_Partnership_Registration\" >What is a  Limited Liability Partnership Registration?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-benefits-of-limited-liability-partnership\/#Features_of_limited_liability_partnership\" >Features of limited liability partnership<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-benefits-of-limited-liability-partnership\/#Process_of_limited_liability_partnership_Registration\" >Process of  limited liability partnership Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-benefits-of-limited-liability-partnership\/#Documents_Required_for_Limited_Liability_Partnership_Registration\" >Documents Required for Limited Liability Partnership Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-benefits-of-limited-liability-partnership\/#Benefits_of_limited_liability_partnership_Registration\" >Benefits of  limited liability partnership Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-benefits-of-limited-liability-partnership\/#Need_of_LLP\" >Need of LLP<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/what-are-the-benefits-of-limited-liability-partnership\/#Conclusion\" >Conclusion&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_Limited_Liability_Partnership_Registration\"><\/span>What is a  Limited Liability Partnership Registration?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Limited Liability Partnership was introduced in 2000 by Partnerships Act 2000. It\u2019s a new kind of corporate structure that combines the flexibility of partnership and benefits of limited liability of the company. By this, we mean that LLP is an alternative corporate business vehicle, which will provide the benefits of Limited Liability of company, further also allows its member the flexibility of organizing their internal management. <\/p>\n\n\n\n<p>In such an organization, some or all the partners have limited liability. Further, in an LLP, one partner is not liable or responsible for any misconduct or negligence. LLP registration provides easy set up of the firm, besides this firm needs to follow less hassle-free day to day operations. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Features_of_limited_liability_partnership\"><\/span>Features of limited liability partnership<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/Features-of-LLP-1024x683.jpg\" alt=\"Features of LLP \" class=\"wp-image-3218\" width=\"552\" height=\"367\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/Features-of-LLP-1024x683.jpg 1024w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/Features-of-LLP-300x200.jpg 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/Features-of-LLP-768x512.jpg 768w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/Features-of-LLP.jpg 1200w\" sizes=\"(max-width: 552px) 100vw, 552px\" \/><\/figure><\/div>\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Process_of_limited_liability_partnership_Registration\"><\/span>Process of  limited liability partnership Registration <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">Obtaining Digital Signature Certificate (DSC);<\/h3>\n\n\n\n<p>Much before initiating the LLP registration process, firstly DSC needs to be obtained for the purposed designated partners of LLP. LLP needs to file its documents online; hence, therefore, all the documents need to be signed digitally. It\u2019s mandatory for the designated partner to <strong><a href=\"https:\/\/corpbiz.io\/dsc-registration\" title=\"DSC Registration\n\">obtain the DSC<\/a><\/strong> from government recognized certifying agency.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Obtaining Director Identification Number (DIN);<\/h3>\n\n\n\n<p>DIN is required to be obtained by every designated member of proposed LLP. The application shall be made in Form DIR-3 to obtain DIN. Along with the application documents required to be attached are like \u2013 Adhaar Card and PAN card. DIR-3 form needs to be signed by the qualified full-time CS of the company, or by the Managing director\/Director existing company in which the applicant is nominated to be appointed as a director.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Reservation of Name;<\/h3>\n\n\n\n<p>LLP-RUN (Limited Liability Partnership \u2013\nReserve Unique Name)is required to be filed for the reservation of name of\npurposed LLP.&nbsp; Central Registration\nCenter shall undertake the process under Non \u2013STP. Before purposing the name, the\napplicant shall visit MCA Portal, providing a free name search facility. This\nservice will provide closely resembling names of an existing company.<\/p>\n\n\n\n<p>The registrar will approve the name which undesirable by the central govt. Or is not being used by any existing LLP. An applicant can recommend two names for the LLP at a single time.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Incorporation of Limited Liability Partnership<\/h3>\n\n\n\n<ul>\n<li>Incorporation form &nbsp;<strong>FiLLiP (Form for Incorporation of Limited Liability Partnership)<\/strong> shall be filed to the registrar of jurisdiction, where the registered office of LLP is situated; <\/li>\n\n\n\n<li>Fees shall be paid as per <strong>Annexure \u2018A\u2019<\/strong>;<\/li>\n\n\n\n<li>Incorporation form can also be used for allotting DPIN if an individual does not have DPIN or <strong><a href=\"https:\/\/corpbiz.io\/din-under-mca\" title=\"Director Identification Number\">DIN<\/a><\/strong>.<\/li>\n\n\n\n<li>Through FiLLiP form, the application for the reservation may be made;<\/li>\n\n\n\n<li> If the purposed name is approved, then this approved and reserved name shall be filled as the proposed name of the LLP.  <\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">File Limited Liability Partnership Agreement&nbsp;<\/h3>\n\n\n\n<p>Mutual rights and duties between the partners and also between the LLP and its partners are governed through LLP agreement.<\/p>\n\n\n\n<ul>\n<li>From 3 needs to be filed with the attached LLP agreement on MCA portal;<\/li>\n\n\n\n<li>And, needs to file within the 30 days of the date of Incorporation.<\/li>\n\n\n\n<li>The LLP Agreement shall be printed on Stamp Paper. The value of Stamp Paper varies from state to state.<\/li>\n<\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/advantages-of-llp-over-private-limited-company\/\">Advantages of LLP (Limited Liability Partnership) over Private Limited Company<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_Required_for_Limited_Liability_Partnership_Registration\"><\/span>Documents Required for Limited Liability Partnership Registration <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">For Partners <\/h3>\n\n\n\n<ul>\n<li>PAN card\/ID proof <\/li>\n\n\n\n<li>Address proof <\/li>\n\n\n\n<li>Residential Proof<\/li>\n\n\n\n<li>Photograph <\/li>\n\n\n\n<li>Passport (In case of NRI\u2019s)<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">For LLP<\/h3>\n\n\n\n<ul>\n<li>Proof of Registered office address<\/li>\n\n\n\n<li>Digital Signature Certificate&nbsp; <\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_of_limited_liability_partnership_Registration\"><\/span>Benefits of  limited liability partnership Registration <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>1<\/strong>. &nbsp;<strong>No limit on Owner of Business<\/strong><\/p>\n\n\n\n<p>Only two partners are required for limited liability partnership. Unlike a private limited company, wherein member\u2019s number is restricted to the limit of 200, there is no such limit of partners in LLP. <\/p>\n\n\n\n<p><strong>2. No minimum contribution required <\/strong><strong><\/strong><\/p>\n\n\n\n<p>No minimum capital required while forming an LLP. An LLP can be formed even with the least possible capital. Furthermore, the contribution of a partner may consist of tangible, movable or immovable or intangible property or other benefits to the limited liability partnership.<\/p>\n\n\n\n<p><strong>3. Minimal cost for Incorporation <\/strong><\/p>\n\n\n\n<p>The cost of\u00a0limited liability partnership Registration is low as compared to the cost of incorporating a private limited or a public limited company.<\/p>\n\n\n\n<p><strong>4. Lower compliance burden <\/strong><\/p>\n\n\n\n<p><strong>&nbsp;<\/strong>In an LLP, only annual returns are required to be filed along with the statement of Accounts and solvency.<\/p>\n\n\n\n<p><strong>5. No requirement of compulsory audit<\/strong><\/p>\n\n\n\n<p>Whether\nit\u2019s a private or public company, irrespective of their share capital, are\nrequired to get their accounts audited. Whereas in LLP, accounts to be audited\nannually except for LLPs having a turnover less than Rs. Forty lacs or Rs. 25\nlacs contribution in any financial year. <\/p>\n\n\n\n<p><strong><em>According to Section 40 (b), \u201cInterest to partners, any payment\nof salary, bonus or commission or remuneration allowed as deductions in the\nhands of Limited Liability Partnership<\/em><\/strong>.\u2019\u2019<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Need_of_LLP\"><\/span>Need of LLP <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It has been\nobserved from a long time, the business formats are required to provide such a\nformat of business which can combine the flexibility of partners and the\nadvantages of limited liability of company, and that too at a very low cost of\ncompliance.<\/p>\n\n\n\n<p>The format of limited liability partnership is useful for the small and medium size of enterprises. LLP has mostly used vehicle for the professional or in the service industry. LLP is itself responsible for its losses and debt occurring in business, rather than that of its partner\/member. Therefore, LLP is recommended as a profit-making business.<\/p>\n\n\n\n<p>Individuals or the operating businesses can be members of LLP\nand shall have at least two members. The rights and responsibilities of all\nmembers shall be laid down in \u201cDeed of Partnership&#8221;. A &#8220;Designated\nMember&#8221; would be held responsible for the operations in relations to\nmaking communication with the companies house, preparations of accounts etc.,\nand will act as a responsible person in case LLP gets dissolves. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion&nbsp; <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>LLP\u2019s are considered to be flexible legal and tax, allowing its partners to get benefited through the less liability format, on which LLP works. The liabilities of partners incurred only in the normal course of business, which does not extend to the personal assets of the partners. Bill concerning LLP was passed back in 2008, and it was supposed that this bill would surely bring a remarkable difference to the existing companies laws in India.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/register-your-limited-liability-partnership-firm-in-india\/\">How to Register Your Limited Liability Partnership Firm in India?\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>We have seen this new trend emerging between the entrepreneurs, who have started using the term-limited liability partnership (LLP). Mostly the Lawyers and Chartered Accountants use \u201cLLP\u201d for their firm, for example (AB &amp;CD, LLP). It\u2019s a kind of business format which combines the flexibility of partners and the benefits of limited liability of a [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":3182,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[155],"tags":[304],"acf":{"service_id":"3"},"authorName":"Shailza Sharma","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2019\/10\/IMG-20190927-WA0001-150x150-22.jpg","authorDescription":"Miss Shailza Sharma, BA. LLB graduate from Himachal Pradesh University. She holds an experience of 2.5 years in various Legal companies and organizations.","postViews":8971,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/3177"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=3177"}],"version-history":[{"count":28,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/3177\/revisions"}],"predecessor-version":[{"id":68059,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/3177\/revisions\/68059"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/3182"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=3177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=3177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=3177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}