Limited Liability Partnership Registration

An LLP is a business partnership where each member’s liability is limited to the amount that they have contributed to the business. Limited liability partnerships (LLPs) are a flexible, legal and tax entity that allows partners to benefit from economies of scale while also reducing their liability.

Limited liability partnerships are registered online. However, it is crucial to get assistance from a third-party for LLP registration in India.

Overview Limited Liability Partnership Registration

Limited Liability Partnership is generally known as LLP in India. Its a special form of business structure that has the features of a traditional partnership and the benefits of limited liability to the Partners of LLP likewise a Private Limited company.

Some of the benefits offered by this business structure is limitation of liability and also ease of compliance is obtained by using this form of business structure. In LLP No partner is liable on account of unauthorized actions of other partners, thus individual partners can safeguard them from joint liability arising from wrongdoing of other partners.

Individuals and entrepreneurs prefer going in for limited liability partnership registration due to ease of conducting business and less compliance as compared to a Company. Generally, law firms, accounting firms, private equity, venture capitalist, architects and real estate firms go for this form of entity.

As per Limited Liability Partnership Act, 2008, a Limited Liability Partnership means an partnership formed and registered under this Act. The primary regulatory authority for limited liability partnership registration in India is the Ministry of Corporate Affairs (MCA).

Benefits of Limited Liability Partnership

Partners of the LLP can enjoy following benefits under the LLP:

• Limited Liability – One of the core advantage of LLLP is that, It protects the member’s personal assets from the liabilities of the business. In case of default in payments by LLP to its creditor cannot go for the personal assets of the partners for the debt that is owed by the LLP.
• Benefits of Traditional Partnership – It is more flexible to organize the internal structure of LLP. For all purposes of taxation LLP is treated like any other Partnership firm.
• Disputes and LLP Agreement – One advantage which is enjoyed by individuals going for limited liability registration is that disputes can be handled appropriately. Any form of disputes that arise between partners can be resolved easily through this agreement.
• Ownership can be easily transferred
• Separate and Independent Legal Entity
• Perpetual Succession
• Minimum Amount of Compliance
• Raising and utilization of funds depends on the partners will
• Lower registration and Compliance Cost
• No requirement of Compulsory Audit
• Non Applicability of Dividend Distribution Tax (DDT)
• No limit on owners of the business

Eligibility Criteria for Limited Liability Partnership Registration

1. Partners
   • Minimum 2 Designated Partners.
   • At least one Partner of the LLP need to be Indian Citizen.
   • Digital Signature Certificate of Designated Partners
   • DIN of Designated Partners

2. Capital Requirements
   • There is no minimum capital contribution requirement for LLP. However, Investment shall be made as per the requirement of the LLP and Each partner has to contribute towards the capital of LLP.

3. Unique Name
   • The LLP shall have a unique name which shall not be similar to the existing Limited Liability Partnership registered in india and the name shall not similar to any registered or applied trademark in India.

4. Registered Office
   • The LLP shall have registered office. However, there is mandatory requirement to have an actual physical place for carrying out day to day correspondence with different forms of regulatory authorities as per the limited liability partnerships act, 2008.

Process of Limited Liability Partership Registration in India

The following process is to be followed for registration of Limited Liability Partnership in India.

1. Obtain Digital Signature Certificate (DSC) for Partners
   • Limited Liability Partnership Registration is a complete online process and Hence all the requisite application forms shall be digitally signed by Designated Partners of the LLP. Every Individual proposed to be appointed as the partner and designated Partner of the LLP shall obtain a Digital Signature Certificate. This certificate will help the partners of an LLP sign documents in electronic as well as digital formats
   • Obtaining a DSC is also online process which can be completed in 1 Day time.

2. Reservation of Limited Liability Partnership Name

The First and very vital decision is to choose name of the LLP which can be done done by one of the partners. The name of the LLP must not go against any provisions of any intellectual property law in force in India and it should not be similar, identical or phonetically similar to existing companies, firms, LLPs, and trademarks. Once the name of the partnership is reserved, the same is valid for 90 days. Hence, Incorporation process shall be completed in that given time period.

3. Filling of online application for submitting documents

After Name Approval, Form FiLLip is to be filed with the registrar of companies for incorporation of Limited Liability Partnership.

Following details has to be filed in the FiLLip form

1. Proposed Business Activity and its code
2. Number and Details of the Designated Partners & partners
3. Address of the registered office
4. Contribution of designated partners and partners

4. Approval of application for Incorporation

Upon verification of documents submitted by the LLP, Application for Incorporation of the LLP is approved by Ministry of Corporate Affairs. Certificate of Incorporation along with the LLPIN is issued form 16 from Central Registration Center of MCA.

5. Drafting and filling of LLP Agreement

LLP Agreement is the utmost vital document of an LLP that administrates the mutual rights and duties of the partners; between the LLP & its partners. Within 30 days from the date of issuance of incorporation certificate, LLP Agreement shall be drafted, stamped, signed, notarized and filed with ROC. LLP Agreement shall be filed in Form LLP 3 online on MCA portal with ROC. Failing to do so would attract penal provisions of the LLP Act, 2008.

6. Post incorporation Compliance of LLP

Post incorporation of LLP, separate application shall be made for securing PAN and TAN Number of LLP. Further, The LLP is required to open a Bank account. Once these steps for limited liability partnership registration are complete, the business can commence.

Documents Required for registration of Limited Liability Partnership

Identity and Address Proof of Directors and Shareholders

• Passport size photographs of the directors
• Copy of Aadhar Card
• Copy of Driving License or Voter ID or Passport
• Copy of PAN Card
• Copy of bank statement or utility bill (not older than two months)
• Copy of Passport (in case of foreign national or NRI)

Address Proof of Register Office

• Copy of electricity or any other utility bill (not older than two months)
• Rent agreement (if rented)
• No Objection Certificate (NOC) from the owner of the property

Time Required to Established a Private Limited Company

As per industry standards, it’s up to 15 business days but being expert in the industry, we complete the process within 7-10 business days subject to document verification by the Ministry of Corporate Affairs (MCA).

5 Easy Steps to Apply For Limited Liability Partership

Document you will get After Registration of Limited Liability Partnership

• Certificate of Incorporation
• Permanent Account Number (PAN) of the LLP
• Tax Deduction or Collection Account Number (TAN) of the LLP
• LLP Agreement
• FiLLip Form
• LLP Form 3
• Direction Identification Number (DIN)
• Digital Signature Certificate (DSC)

FAQs

1. What are the benefits of a limited liability partnership?

A limited liability partnership has the following benefits:

• The nature of a limited liability partnership firm is that of a body corporate.
• It has a legal entity separate from its partners.
• It has perpetual succession.
• Any change in the partners of a limited liability partnership shall not affect
• the existence, rights or liabilities of the limited liability partnership.

Thus, forming a limited liability partnership firm is more favorable.

2. Which Business groups are best suited for a limited liability partnership?

A Limited Liability Partnership may be formed by any group to carry on any lawful

business with the view to make profit. As per clause (e) of Section 2(1) of the Act,

the term “business” is defined to include every trade, profession, service and

occupation.

Accordingly, this business vehicle may be used by: Professionals, Joint Ventures, Venture Capitals  and Small and medium sized businesses.

3. What is a “foreign limited liability partnership”?

As per Section 2(1)(m) of the Act, a “foreign limited liability partnership” means

a limited liability partnership formed, incorporated or registered outside India

which establishes a place of business within India.

4. Can a foreign LLP be formed in India?

Yes a foreign LLP can be formed in India. This process can be carried out by filing form-27 with the respective authority. However, authorised representatives have to be appointed as per the provisions related to an LLP.

5. Can an LLP secure FDI?

Yes foreign direct investment is allowed for an FDI. Previously, FDI was only allowed for particular sectors in the government route. However, due to changes in the FDI guidelines, LLPs can secure FDI through the automatic route.

6. What is the basic difference between a Limited Liability Partnership and a General Partnership?

A Limited Liability Partnership is a legal entity separate from its partners and therefore, offers limited liability to its partners whereby any debts and obligations of the LLP will be borne by the assets of the LLP.

In the case of a conventional partnership, the partners are jointly and severally liable for each debt and obligation of the partnership firm.

7. Are there any form of penalties for non-compliance of the provisions relating to limited liability partnership?

The following penalties would be applicable for non-compliance of regulations under the LLP:

• LLPs are required to file LLP Form 11 – Annual Return to the ROC within 60 days. Non-compliance with the same would create a penalty of Rs. 100 per day.
• Income Tax returns have to be filed by the LLP.
• Section 34 states that statements of accounts and solvency reports in LLP form 8 have to be submitted by the LLP.

8. Are there any form of disqualifications for becoming a partner in an LLP?

Yes, the following are the disqualifications for becoming a partner:

• If the partner has some form of civil or criminal penalties .
• If the partner has been declared and adjudged insolvent.
• If the partner has carried out any act related to moral turpitude.

9. Would GST be applicable for an LLP?

Yes as an LLP is a separate legal entity, GST would be applicable. Moreover, any services which are rendered by an LLP would attract some form of GST. An LLP has a PAN card; hence the rate of GST would be levied on the entity.

10. Are appointment of officers mandatory for an LLP?

No. Appointment of officers is not mandatory for an LLP. Hence officers such as a company secretary or CEO would not be required to be appointed under this act.

11. Can an existing partnership firm be converted to LLP?

Yes, an existing partnership firm can be converted into LLP by complying with the Provisions of clause 58 and Schedule II of the LLP Act.

12. Can a private limited company be converted to an LLP?

Yes, any existing private company or existing unlisted public company can be converted into LLP by complying with the Provisions of clause 58 and Schedule III and IV of the LLP Act.

Only a listed company or a public limited company cannot be converted into an LLP.