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LLP Registration: Empowering Business Ventures in India

In India, Businesses are increasingly choosing Limited Liability Partnerships (LLPs) as their preferred organizational structure. The advantages of a business and a partnership firm are combined in an LLP. An LLP, as its name implies, is a partnership firm created by two or more partners in an LLP who sign an LLP agreement. On the other hand, an LLP, like a business, enjoys perpetual succession and limited liability for its partners.

The Limited Liability Partnership (LLP) idea was first introduced in India in 2008. The responsibilities and rights of authorized partners are specified in the LLP agreement. They bear direct responsibility for ensuring that all clauses in the LLP agreement and the Limited Liability Partnership Act, 2008, are followed.

What is an LLP?

An LLP was introduced in India in 2008. It is a common company structure. It is a flexible legal structure that permits its participants to engage in business management while providing them with minimal liability protection. It possesses traits of both a partnership firm and a company. It may be managed with the same flexibility as a partnership business, but it has the advantages and features of a private limited company.

The partners of LLP join together to do business in accordance with an LLP agreement. Compared to a business, an LLP has fewer compliance requirements, but because it functions as a distinct legal entity from its partners, the partners' liability is limited. As a result, an LLP requires less paper works than a company registration in India.

Since limited liability partnerships (LLPs) protect participants' assets and have less complicated legal requirements than standard companies, they have gained popularity among entrepreneurs across a range of sectors.

Features of LLP

An Indian LLP has the following features

Body Corporate

A Limited Liability Partnership (LLP) is a business entity that is created and registered under the Limited Liability Partnership Act 2008, as stated in Section 3. It is independent of its partners and a separate legal entity.

Perpetual Succession

A limited liability partnership has the benefit of permanent succession, in contrast to a general partnership business. This implies that the LLP can do business across India even in the event that one or more partners retire, the LLP becomes insolvent, or any partner becomes mentally incapacitated or passes away. The LLP is also able to hold property and engage in agreements under its own name.

Separate Legal Entity

Like businesses or corporations, an LLP has a separate legal entity. It is entirely responsible for its debts and possessions. Furthermore, the liability of each individual partner is restricted to the amount they have contributed to the LLP. Therefore, an LLP is a separate legal entity and can make contracts in its own name.

Restricted Liability

Every partner is an agent of the LLP for its business operations under Section 26 of the Act. A partner, however, is not another partner's agent. Since each partner's liability is limited at their agreed-upon contribution to the LLP, all partners are shielded from personal liability, and the LLP agreement governs this.

Minimum and Maximum Partners

A minimum of two partners are required to incorporate an LLP, and two of those partners must be designated partners. It should always be the case that at least one designated partner lives in India. The LLP's maximum number of partners is unrestricted.

Advantages of LLP in India

If you wish to form an LLP, you must be aware of the advantages of registering an LLP in India

Limited Liability of Partners

The LLP's partners' liability is restricted. The liability of partners is limited to their respective contributions. This implies that they are not personally responsible for any losses incurred by the company and are only obligated to pay the amount of their contributions.

Minimal expense and reduced cost

Compared to the price of establishing a public or private limited company, the formation of an LLP is less expensive. There are also a few compliances that the LLP must adhere to.

No minimum capital contribution

A minimum capital requirement is not necessary for the incorporation of a Limited Liability Partnership. Any amount of funds Contributed by the partners can establish it.

Taxation through pass-through

Since LLPs are taxed as pass-through businesses, the partners bear the direct taxation of the LLP's revenue. By doing this, businesses that divide their gains to shareholders avoid paying double taxes.

Adaptability

In terms of ownership and management structure, LLPs are fairly adaptable. There are no limitations on the transfer of ownership shares, and the partners are free to decide on any management structure.

LLP Name Structure

Select a unique name for the proposed LLP that must not resemble any other company name. If your selected name resembles any other company registered with the Ministry of Corporate Affairs, your suggested name will not be approved. Moreover, you can add a description explaining in detail what your LLP performs. This facilitates customers' understanding of your offerings.

Put LLP or Limited Liability Partnership at the end of your LLP name. This is required to display your organizational structure.

Eligibility Criteria for LLP Incorporation

To register an LLP in India, you will be required to fulfil certain conditions or eligibility criteria, and the LLP registration journey starts from here

  • The partners of the proposed LLP must be at least 18 years of age.
  • A minimum of two people are needed for registration of an LLP.
  • There is no upper limit on the number of partners for registration of LLP.
  • There is no minimum capital needed to establish an LLP except for stamp duty.
  • At least one of the partners of an LLP must be a resident of India.
  • The name of the proposed LLP must be unique.

Necessary Papers required to Register an LLP?

In order to register an LLP, certain required necessary papers are filed online to the Registrar of Companies as per the provisions specified in the LLP

Necessary Papers of Partners

The LLP company partners are required to file the following necessary papers

  • PAN cards and identity necessary papers of each partner.
  • Address proofs of partners, such as driver's license, passport, or voter ID.
  • Passport-size photograph on the white backdrop.
  • Passports of foreign citizens and NRIs who want to join an LLP as partners.

Necessary Papers of LLP

An LLP needs to submit the following necessary papers during registration

  • During LLP registration or within 30 days of the LLP's incorporation, proof of registered office address must be provided. If the registered office of the LLP is located in a rented space, the landlord's NOC, which allows the LLP to use the place for its business, is required. Furthermore, you will need to provide at least one proof of address, such as utility bills that are no more than two months old.
  • A Certificate of Digital Signature (DSC)

LLP Registration Process

Although LLP is a partnership, as it contains features of a company in India, the process of registration of LLP is different. Here is a step-by-step process for LLP registration

Step 1: Obtain Digital Signature Certificate (DSC)

Getting the digital signatures of each of the LLP's selected partners is the first stage in registering the LLP. All necessary papers and applications submitted to the LLP must have a digital signature. The digital signatures on these papers facilitate the certificate-obtaining process even further.

Government organizations with certification, such as the National Informatics Center, E-MUDHRA, IDRBT Certifying Authority, CDAC, and NSDL, can provide the necessary digital signatures.

Step 2: Apply for a Designated Partner Identification Number (DPIN)

All designated partners or those planning to become designated partners of the new LLP must apply for their DPINs. A Form DIR-3 application must be submitted in order to request a DPIN. The form requires scanned copies of the required papers, which are often Aadhaar and PAN. A company secretary, chartered accountant, or full-time practising cost accountant should also sign the paper.

The designated partners of the LLP can only be a natural person. Therefore, only natural individuals and not artificial legal organizations like companies, LLPs, OPCs, associations of persons, etc., are able to receive the DPIN.

Step 3: Name Approval

The applicant must get a Reserve Unique Name (LLP-RUN) for the LLP, which may be processed at the Central Registration Center, in order to register a proposed limited liability partnership. Nevertheless, it is generally suggested to look up a unique name on the MCA website that has been taken yet before mentioning the name. This will yield a list of businesses that share the same name as the proposed limited liability partnership. The chosen name must not be too close to any already existing LLP for the registrar to accept it. In order to continue with the registrar's approval, the LLP-RUN must be filed with the appropriate fee.

Step 4: Incorporation of LLP

In order to incorporate an LLP, the Limited Liability Partnership (FiLLiP) form must be completed and filed with the registrar. The LLP cost of fees must follow Annexure 'A'. A maximum of two partners are required to submit an application for registration.

Step 5: File Limited Liability Partnership (LLP) Agreement

The partners' rights and liabilities are governed by this agreement. Form 3 of the agreement may be submitted electronically via the MCA Portal. Within thirty days after the date of formation, Form 3 for an LLP agreement must be filed. Every state has a particular stamp paper that must be used for printing LLP agreements.

Step 6: Obtain a Certificate of Incorporation

The ROC will issue the Certificate of Incorporation, which formally recognizes the LLP's existence when necessary papers and applications submitted during registration have been filed and verified.

Step 7: Apply for PAN and TAN

LLP must obtain PAN and TAN by filing an application after receiving the Certificate of Incorporation.

Start an LLP in India Effortlessly with Corpbiz

Check Business Name Availability

The procedure of verifying if a business name is available for your LLP in India is made easier by Corpbiz. Take help from our experts to make sure the name you want is available for registration.

Online Trademark Search

To protect your LLP's brand identification, our experts help you with online trademark search and let you know whether you selected is available from registration or not. With convenience and accuracy, Corpbiz helps you secure your intellectual property rights.

Proprietorship vs Limited Liability Partnership (LLP) vs Company

Find the ideal structure for your business! Corpbiz provides professional analysis comparing company, LLP, and proprietorship forms, enabling you to make an informed choice that will maximize the success of your business. You can easily select the correct business structure that suits your business needs.

Necessary Papers Required For LLP Registration

Corpbiz offers a comprehensive checklist of necessary necessary papers, which streamlines the LLP registration procedure. You can rely on us for a simple and easy registration process.

Related Business Registrations

Corpbiz helps you with relevant business registrations in addition to LLP registration. We guarantee that your firm complies with all required registrations, including PAN, TAN, GST, and more.

MCA Compliance

Maintain compliance with ease! Corpbiz provides thorough Ministry of Corporate Affairs (MCA) compliance services to make sure your limited liability partnership (LLP) complies with all legal obligations without difficulty.

LLP Forms

FiLLiP

In India, an LLP can be incorporated using this form. It contains information regarding the first LLP agreement, partners, and their contributions in addition to the proposed LLP.

RUN LLP

A name can be reserved for the prospective LLP with this form prior to its incorporation. It assists in guaranteeing that the preferred name is both exclusive and available for the LLP.

Form 3

When amendments are made to the LLP agreement or information about the LLP agreement is provided during incorporation, Form 3 is submitted to the Registrar of Companies (RoC).

Form 8

Every year, LLPs must submit Form 8 with information on their financial situation, solvency, and adherence to accounting rules.

Form 11

LLPs are required to file Form 11 (Annual Return of LLP) every year, which includes vital information on the LLP's status, designated partners, and number of partners.

Form 24

An application to the ROC is submitted in this form to strike the name of LLP from its registers.

How to Get a Limited Liability Partnership Registration Number?

In India, obtaining an LLP Registration Number necessitates following a defined procedure. As an LLP can be formed by any two or more people or business organizations, first confirm the eligibility requirements. Select a unique name and use the RUN LLP form to verify its availability. Create incorporation paper works, such as the FiLLiP form, which should include the original LLP agreement, partner details, LLP specifics, and contributions. Send these papers through the Ministry of Corporate Affairs (MCA) site along with the required payment.

The necessary papers are verified by the ROC after submission. A Certificate of Incorporation with the distinct LLP Registration Number is sent upon approval. Use Form 3 to prepare and file the LLP Agreement, including partner duties and obligations, within 30 days. The observance of this agreement is essential. The LLP is uniquely identified by the LLP Registration Number that is supplied in the Certificate of Incorporation, which permits it to start operating within the parameters specified in the agreement. Consulting with legal experts at Corpbiz guarantees a smooth registration procedure while complying with all regulatory requirements.

Who is required to Register an LLP?

An LLP can be formed by any two or more people, including individuals and business entities. An LLC is a viable option for those people or organizations that want to establish a limited liability company with the flexibility of a partnership. Because of its benefits, professionals, company owners, SMEs, and startups frequently select this type of organizational structure.

What is the Registration Fee for LLP?

The LLP's capital contribution determines the cost of forming an LLP. The Ministry of Corporate Affairs (MCA) sets the fee schedule, which is based on the total amount of money that each member of the limited liability partnership has contributed. Overall, an LLP costs less than other business structures.

What is the time involved for LLP Registration?

Several factors, including the completeness and correctness of the necessary papers, the schedule of the Registrar of Companies, and the effectiveness of the filing procedure, might affect how long it takes to register an LLP in India. In general, the registration procedure can take anywhere from 15 to 30 working days if all necessary paperwork is correctly completed and there are no follow-up questions or requirements from the authorities.

It is advisable to obtain advice from legal professionals or chartered accountants at Corpbiz to guarantee a seamless and fast registration procedure. We can help you with necessary paper preparation, compliance, and quickly navigating through the registration process.

Why do business owners prefer LLP over Partnership Firm?

Due to several important benefits, Limited Liability Partnerships (LLPs) are frequently chosen by business owners over Partnership Firms. LLPs provide limited liability, as opposed to Partnership Firms' unlimited liability, protecting personal assets from corporate obligations. LLPs are further protected from individual legal risks by having their own legal entity status, which grants them the ability to possess property, engage in contracts, and sue on behalf of their partners. Whereas Partnership Firms are susceptible to dissolution, perpetual succession guarantees continuity even in the event that existing LLP partners change. LLPs convey professionalism, which helps them gain the trust of people who invest in the LLP and clients. They may offer tax benefits and have easier compliance. LLPs are a preferred business option because they offer more adaptable ownership and management structures that satisfy the interests of a variety of partners.

Frequently Asked Questions

  • Visit the official website of MCA.
  • Choose MCA Services from the Main Menu. After that, a drop-down menu will appear with the option to choose Master Data; click on it.
  • From the Master Data Drop-Down Menu, select View Company or LLP Master Data, and you'll be able to find the registration status of your LLP.

A limited liability partnership's formal and legally enforceable agreement between its partners is known as an LLP agreement. It lays forth the members' obligations and rights as well as the guidelines for managing the LLP in accordance with the Limited Liability Partnerships Act of 2000 and other LLP laws.

Section 23 of the Act mandates that an LLP Agreement be executed. After the LLP is incorporated, the LLP Agreement must be submitted in E-Form 3 to the registrar within 30 days.

When an LLP engages in interstate supply, GST is applicable. The LLP is required to register for GST and acquire an Inter-State GST (IGST) registration if it undertakes supply outside of the state in which it is registered.

The number of partners or designated partners in an LLP may be added at any point throughout the operation of the company; there is no limit on this.

An LLP is recognized by law as a distinct legal entity. A partnership firm's legal standing is the same as that of its partners. An LLP's partners' liability is restricted to the amount of money they invested in the LLP. In a partnership firm, the liability of a partner is not limited.

No, The LLP is a distinct legal entity and is accountable for the whole amount of its assets; however, the partners' liability is only as much as their agreed-upon investment in the LLP.

If one partner leaves the partnership, the remaining partners will have to go through a dissolution procedure. In this scenario, the partners, including the withdrawing partner, will get any leftover assets from the firm when its obligations are paid in full, based on their capital accounts.

An LLP only has members. It does not have directors, shares, or shareholders.

An LLP allows any person or business entity to become a partner. LLP partners cannot be children, mentally ill individuals, or discharged insolvents.

Since limited liability partnerships are distinct legal organizations, the chosen partners are responsible for keeping an accurate book of accounts and submitting an annual report to the Ministry of Corporate Affairs (MCA) every year.

A rent agreement and a landlord's no objection certificate are required if the registered office is rented out. The landlord's approval for the LLP to use the space as a registered office will be necessary papered in the no-objection certificate.

Every LLP is obliged to hold an Annual General Meeting (AGM) each year, whereupon the partners of the LLP review and approve the financial accounts, choose auditors, and debate any other business-related issues.

Public disclosure is an LLP's primary drawback. Financial statements must be sent to ROC for them to be made public. The members' income that they may not want to be made public may be disclosed in the accounts. Income is subject to personal income taxes.

A minimum capital requirement is not necessary to incorporate an LLP. A minimum paid-up capital is not necessary to proceed with incorporation. Any quantity of funds supplied by the partners can establish it.

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