BASIC PLAN
LLP REGISTRATION
o Limited Liability Partnership is a hybrid of Private Limited Company and traditional Partnership Firm.
o It is ideal for small and medium-sized businesses.
o According to Ministry of Corporate Affairs, Limited Liability Partnership is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
o This means that personal assets of the partners cannot be used for paying off the debts of the company.
o Partners are liable only to the extent of their agreed contribution in the LLP.
o However, the LLP is liable completely to the extent of its assets.
STANDARD PLAN
- DPIN and DSC for 2 Directors.
- LLP Name Search & One Name Approval.
- Drafting of MOA & AOA.
- Company Incorporation.
- LLP Agreement.
- Company PAN and TAN
- GST Registration.
Rs 7,499/-
PREMIUM PLAN
- DPIN and DSC for 2 Directors.
- LLP Name Search & One Name Approval.
- Drafting of MOA & AOA.
- Company Incorporation.
- LLP Agreement.
- Company PAN and TAN
- GST Registration.
- MSME Registration.
Rs 7,999/-
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LIMITED LIABILITY PARTNERSHIP : LLP REGISTRATION
- Limited Liability Partnership Registration is ideal for Small and Medium-sized Businesses with LLP, it is a hybrid of Private Limited Company and Traditional Partnership Firm.
- According to Ministry of Corporate Affairs, Limited Liability Partnership, is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
- As the name suggests, partners in LLP have limited liability. This means that personal assets of the partners cannot be used for paying off the debts of the company.
- Partners are liable only to the extent of their agreed contribution in the LLP.
- However, the LLP is liable completely to the extent of its assets.
- Since many entrepreneurs are opting for this, it has become a very popular form of business in the recent years.
- A Limited Liability Partnership is a Business entity incorporated under the LLP Act, 2008. The key advantage of an LLP over a Partnership firm is that Partners are not liable for the misconduct of other partners.
- LLP also offers its partners the safety net of Limited Liability. Unlike the shareholder of a Private Limited Company, Partners of an LLP can directly manage the Business, which makes LLPs an attractive proposition for Business incorporation.
- Businesses that have no requirement for Equity funding in their lifecycle should opt for Limited Liability Partnership as equity shares cannot be issued by LLPs.
- However, where there is a need for Businesses to attract Equity funding then Private Limited Companies are a better option as compared to LLPs. Examples of such businesses are closely held firms offering professional services such as Architects and other Professional Services.
ADVANTAGES OF LIMITED LIABILITY PARTNERSHIP (LLP)
A LLP offers safety to the Personal Assets of the Partners in the form of Limited Liability in the event of a liquidation. In the scenario where an LLP is unable to repay its debts, the Personal Assets of the Partners are safe and the Partners are only liable for the initial amount invested in the Business. However, this does not hold true if a fraud has been discovered on behalf of a partner.
A LLP continues to exist until it is legally dissolved by its Partners. Death or departure of any Partner for any reason has no effect on the LLP’s existence and the LLP continues to exist even when there is a change in ownership.
A LLP is a distinct entity from its Partners which essentially implies that it is competent to contract, can sue and be sued. A key point to note is that a Partner of an LLP is not liable for the misconduct of another Partner.
In case the Capital Contribution of an LLP is lesser than 25 Lac Rupees and Turnover less than 40 Lac Rupees, there is no requirement of an Audit. This particular feature makes LLPs a preferred choice for Small Businesses as well as Startups.
The business of the LLP is managed by the Partners who are also the Owners of the Business. Here there is a clear difference from a Private Limited Company, wherein the shareholders of the Company can differ from the Company Directors. This is one of the reasons that Venture Capitalists prefer not to invest in an LLP as there is a lack of clear distinction in ownership
It is much easier and cheaper to run an LLP as there is just three compliance every year.
Since an LLP is owned by its Partners, they have complete freedom with regards to Agreement drafting in the matter of their rights and duties.
REQUIREMENT FOR LLP REGISTRATION
- LLP should have an Authorized Capital of at least Rs. 1 Lakh.
- A minimum of 2 Partners.
- There is no Limit on Maximum number of Partners.
- A minimum of 1 designated Partner to be Indian Resident.
- LLP office Address Proof.
- If a body Corporate is a Partner, a natural person must be nominated to represent it.
- Each Partner must have an Agreed Contribution towards the Shared Capital.
PROCEDURE FOR LLP REGISTRATION
Application of DSC and DIN:
- Each and every of the Partners must apply for Digital Signature and DPIN.
- Digital Signature is an Online Signature which is utilized for filing.
- DPIN refers Designated Partner Identification Number is a unique number that identifies the partner of an LLP.
COMPANY REGISTRATION
- NAME APPROVAL:
- The Partners in a Limited Liability Partnership are required to register towards the Ministry of Corporate Affairs (MCA).
- The Approval of the Name will be made by the Registrar only if the Central Government does not deem it undesirable. The Name should not hold any resemblance to any of the existing partnership firms, LLPs, trademarks, or body Corporates.
LLP AGREEMENT
- The next step is to draft the LLP Agreement and other documents for Registration. An LLP Agreement is very crucial in a Limited Liability Partnership as it determines the mutual rights and duties amongst the partners, and between the LLP and the Partners.
- The Partners enter into the LLP Agreement upon Registering the LLP by filing Form 3 Online on the MCA portal. This procedure has to be done within 30 days of the date of Incorporation.
Get LLP Incorporation Certificate:
- File the necessary Forms and documents with the Registrar.
- Once the Registrar Approves all the Forms and documents, you get your LLP Incorporation Certificate and are almost set for running your Business.
Apply for PAN, TAN and Bank Account:
- An applicant is then required to apply for PAN and TAN. PAN and TAN are generally received in 7 working days.
- After this, the applicant could submit the Incorporation certificate, MOA, AOA as well as PAN with a bank in order to open the bank account.
COMPARISON OF BUSINESS ENTITY TYPES
| Type | Proprietorship | Partnership | LLP | Company |
|---|---|---|---|---|
| Definition | Unregistered type of business entity managed by one single person. | A formal agreement between two or more parties to manage and operate a business. | A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company. | Registered type of entity with limited liability to the owners and shareholders. |
| Ownership | Sole Ownership | Min 2 Partners, Max 50 Partners | 2- Unlimited | Min 2 Directors, Min 2 Shareholders, Max 15 Directors, Max 200 Shareholders. |
| Legal Status of Entity | Not Considered as separate Legal entity | Not Considered as separate Legal entity | Considered as separate Legal entity | Limited to the extent of share capital |
| Registration | Not Compulsory | Optional/ Can be Registered under partnership Act 1932 | Registered Under MCA | Registered Under MCA |
| Transferability Option | Not Allowed | Not Allowed | Can Be Transferred | Can Be Transferred |
| Taxation | As in Individual | 30% of Company Profit | 30% of Profit Plus CESS and Surcharges applicable | 30% of Profit Plus CESS and Surcharges applicable |
| Annual Filings | Income Tax Returns with the Registrar of companies | Income Tax Returns with the Registrar of companies | Filed with the registrar of the company | Filed with the registrar of the company |
FREQUENTLY ASKED QUESTION - FAQ.
What is LLP Company ?
LLP is a Limited Liability Partnership which has features of both, a partnership and a corporation and partners have limited liabilities and are governed by Limited Liability Partnership Act 2008.
How many people are required to form LLP?
Minimum two people are required to form LLP and there is no limit on maximum number of partners.
Are there Tax benefits for LLP?
Yes. There are some tax benefits for LLP like Dividend distribution tax and Minimum alternative tax.
How to become a partner in LLP ?
Partners are decided during incorporation of the company and later can increase in number after fulfilling specific conditions to become a partner.
What is LLP Agreement ?
LLP Agreement is a contract between members of an LLP which generally contains all the rules and obligations for the members, member’s investment, regulations regarding property, profit and loss sharing, decision-making process of the company among other things.
Can I register LLP at my Home address ?
Yes. An LLP can be registered at your home address.
What are LLP Annual Filing ?
LLP Annual filing includes following components: Annual Return Statement of the Accounts or you can say Financial Statements of the LLP Income Tax Returns Filings.
Do I need to be physically present to incorporate an LLP ?
No. This process is completely online and physical presence is not needed.
What is DPIN ?
DPIN or the Designated Partner Identification Number is a unique number that identifies the partner of an LLP. • When any person is appointed as an LLP partner, the DPIN must be mentioned in the relevant documentation.
Does LLP require renewal every year?
No. An LLP continues its existence until it is closed down officially by its owners. However, an LLP is required to file basic annual returns with the office of Registrar of Companies (RoC).
What is DSC ?
- Digital signature or a DSC is an electronic signature of a person which is in encrypted form.
- DSC is used for the signing of e-forms (electronic forms) while filing documents for company registration.
IS IT POSSIBLE TO CONVERT PRIVATE LIMITED COMPANY OR A PARTNERSHIP FIRM TO AN LLP ?
Yes. A Private Limited Company or a Partnership Firm can be converted to an LLP as per due process.
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