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LLP Registration
LLP Registration
LLP Registration
Depend on our quick, affordable and highly reliable service for LLP registration. Consult with an expert to start your business as a Limited Liability Partnership (LLP) today| Company Details | |
| Act | Limited Liability Partnership Act, 2008 |
| Registration Requirement | Mandatory |
| Number of members | 2 – Unlimited |
| Separate Legal Entity | Yes |
| Liability Protection | Limited |
| Statutory Audit | Dependent |
| Ownership Transferability | Yes |
| Uninterrupted Existence | Yes |
| Foreign Participation | Allowed |
| Tax Rates | High |
| Statutory Compliances | Moderate |
Tags: llp, registration, starting, business, india
Understanding LLP Registration as a Business Structure
Limited Liability Partnership (LLP) is a balanced structure, carrying benefits conventional partnership and still limiting personal liabilities of the partners. It is regulated as a contractual agreement between the partners under the Limited Liability Partnership Act, 2008. It has quickly become a popular choice for services and professional firms like Chartered Accountants, recruiting firms, consulting businesses, etc.
LLP as Compared to Private Limited
LLPs are similar to Private Limited Companies with respect to compliance and operational requirements. Recognized as a separate legal entity from the partners, it can contract or be involved in any legal proceedings in its own name. That enables the partners of an LLP to separate business liabilities or debts being recovered from their personal assets. Compliance requirement here is greater than regular partnership firms. However, Compared to a private limited company structure, it is easier to incorporate and maintain.
As a drawback, ownership transfer of a Limited Liability Partnership is not as easy as of a company. Neither an LLP can issue ESOP. For this reason, LLP is not the most ideal choice for startups who want to hyper-grow, seek seed investor or venture capital funding, or issue share capital to their employees.
Registration of LLP is Simple with TaxClue.co.in
The process of LLP Registration in India is revamped by the Ministry of Corporate Affairs. A quicker process of LLP incorporation is made available on 2nd October 2018 as part of the ease of doing business initiative by the government. Experts at TaxClue have helped hundreds of entrepreneurs with the LLP registration process, in all major cities of India including Mumbai, Delhi, Bangalore, Pune, Hyderabad, and more. Our services have equally relevant reach within smaller cities and towns in the country.
Services Covered
PAN
TAN
Incorporation Certificate
LLP Deed
What are the advantages of registering a business as an LLP?
Limited Liability of Partners
Because an LLP can enter into a contractual relationship in its own capacity, it offers a great advantage to the partners for limiting their personal risk. Liability of financial contribution of any partner is restricted to the capital contribution as per the LLP agreement. Many new age businesses prefer LLP registration over partnership so that their personal assets remain safe in case of loss, or even insolvency. Further, one partner is not held responsible for the actions of negligence or misconduct of any other partner.
Operational Flexibility
LLP Agreement, deed among partners of an LLP, clarifies operating structure including rights and responsibilities of the partners. Typically, LLP would select a “Designated Member” who would control day-to-day operations. It can have individuals or existing businesses as members. Further, this structure allows to clearly define roles of the partners and their respective responsibilities. It could also help in protecting partner’s interest in case of loss because of an unlawful act of any other partner.
Separate Legal Existence
Registration of LLP creates a separate legal identity than its partners. Governed by the LLP Act of 2008, it allows the business to contract with other entities, take legal action, own assets and borrow funds in the name of an LLP itself. It is a major advantage that is not available to a regular partnership firm
Lower Compliance Requirement
A key benefit of registering an LLP over a private company is lesser compliance requirement. It doesn’t have a mandatory audit requirement until a certain level of turnover or contribution. Unlike companies, compliances related to board meetings, statutory meetings, etc. do not apply to LLPs. Professional services for compliance are typically available at cheaper rates than those for companies, making it cost-effective to maintain an LLP.
No Limit on Owners of Business
An LLP requires a minimum of 2 partners while there is no limit on the maximum number of partners. This is in contrast to a private limited company wherein there is a restriction of not having more than 200 members.
No Requirement of Compulsory Audit
All limited companies, whether private or public, irrespective of their share capital, are required to get their accounts audited. But in the case of LLP, there is no such mandatory requirement. This is perceived to be a significant compliance benefit. A limited liability partnership is required to get the audit done only in the case that:
i. The contribution of the LLP exceeds Rs. 25 lakhs, or
ii. The annual turnover of the LLP exceeds Rs. 40 lakhs.
Documents required for registration of an LLP
PAN Card
PAN Card of shareholders and Directors. Foreign nationals must provide a valid passport.
Partners Address Proof
Aadhar card and Voter ID/ Passport/ Driving License of Shareholders and Directors.
Photograph
Latest Passport size photograph of Shareholders and Directors.
Business Address Proof
Latest Electricity Bill/ Telephone Bill of the registered office address
NOC from owner
No Objection Certificate to be obtained from the owner(s) of registered office
Rent Agreement
Rent Agreement of the registered office should be provided if any
Note
In case of NRI or Foreign National, documents of the partner must be notarized or apostilled
Process Flow
Start Your LLP – Quick and Easy!
1. Answer Quick Questions
- Pick a package for LLP registration that best fits your requirements
- It takes less than 10 minutes to fill in our questionnaires
- Provide basic details & documents required for LLP registration
- Make payment through secured payment gateways for LLP registration fees
- You are assisted by our experts throughout the process
2. Relax While Team of Experts Get It All Done
- Assigned Relationship Manager
- Procurement of Digital Signatures (DSC)
- Application for LLP Name Reservation
- Certificate of LLP Incorporation
- Application for Director Identification Number (DIN)
- Application for PAN and TAN
- Drafting of LLP agreement and other required documents
3. Wow! LLP Registration was Easy
- Your business is registered, get-set-grow!
- All it takes is 15 – 18 working days to register and incorporate your LLP in India*
How Long does It Take?
Day 1 - 2
- Application for Digital Signature Certificate
Day 2 - 5
- Checking LLP Name availability
- Application for Name Reservation
- Reservation of LLP Name
Day 6 - 10
- Drafting the LLP incorporation document
- Filing application for LLP registration
- Application for DIN allotment of Designated Partners
- Certificate of LLP Incorporation
Day 11 - 14
- Application for PAN and TAN of LLP
- Drafting of LLP Agreement
Day 15 - 18
- Payment of Stamp Duty
- Filing of LLP Agreement
- Government processing time
LLP vs. Private Limite Company vs. Partnership
| LLP Registration | Private Limited Company | One Person Company Registration | Sole Proprietorship Firm Registration | Partnership Firm Registration | Section 8 Company | Public Limited Company Registration | Nidhi Company Registration | |
| Act | Limited Liability Partnership Act, 2008 | Companies Act, 2013 | Companies Act, 2013 | No specified Act | Indian Partnership Act, 1932 | No specified Act | Companies Act, 2013 | Companies Act, 2013 |
| Registration Requirement | Mandatory | Mandatory | Mandatory | No | Optional | No | Mandatory | Mandatory |
| Number of members | 2 – Unlimited | 2 – 200 | Only 1 | Only 1 | 2 – 50 | Only 1 | Unlimited | Unlimited |
| Separate Legal Entity | Yes | Yes | Yes | No | No | No | Yes | Yes |
| Liability Protection | Limited | Limited | Limited | Unlimited | Unlimited | Unlimited | Limited | Limited |
| Statutory Audit | Dependent | Mandatory | Mandatory | Not mandatory | Not mandatory | Not mandatory | Mandatory | Mandatory |
| Ownership Transferability | Yes | Restricted | No | No | No | No | Unrestricted | Unrestricted |
| Uninterrupted Existence | Yes | Yes | Yes | No | No | No | Yes | Yes |
| Foreign Participation | Allowed | Allowed | Not Allowed | Not Allowed | Not Allowed | Not Allowed | Allowed | Allowed |
| Tax Rates | High | Moderate | Moderate | Low | High | Low | Moderate | Moderate |
| Statutory Compliances | Moderate | High | Moderate | Less | Less | Less | High | High |
FAQs
What are the minimum requirements to register a LLP in India?
There must be at least two individuals to be appointed as Designated Partners, out of which one must be an Indian resident. Also, there is a pre-requisite to have an address of a business in India so as to register it as a registered office for your LLP.
Is there any minimum capital requirement for LLP registration in India?
No. There is no minimum amount prescribed to form an LLP in India. It can be started with any amount of capital demanded by the business. Although there is no minimum requirement, every partner must make a contribution financially to form LLP. The amount of capital contribution is disclosed in the LLP Agreement and amount of stamp duty is decided by the total contribution amount.
How to reserve the name for a Limited Liability Partnership?
LLP name availability is as an essential part for an online LLP registration. The name of an LLP is reserved through a web based form named “LLP-RUN” (Reserve Unique Name). The partners can provide maximum of 2 names in preferential order to reserve any one. The registrar may ask to re-submit the application with different name, if names do not fall under criteria of uniqueness, relevancy or does not fulfil the necessary requirements
What are the requirements to be a Partner/ Designated Partner for LLP formation in India?
There are no limitations in terms of citizenship or residential status to be a Partner in LLP. Therefore, the LLP Act, 2008 allows Foreign Nationals, including Foreign Companies & LLPs to incorporate LLP in India. The pre-requisite is to have at least one Designated Partner who is a resident of India. However, the person should be of the age 18 years. This is to ensure that the person in LLP is not a minor and competent enough to enter into contract. Also, the proposed Designated Partner shall have DIN.
What is Director Identification Number (DIN)? Is DPIN is required for LLP Registration?
The concept of DPIN (Designated Partner Identification Number) is replaced by DIN with respect to the LLP incorporation. Director Identification Number is a unique number assigned by the MCA to Individuals on whose behalf the application is made. This allows any individual to be Director in any Company or Designated Partner in LLP.
The application of DIN allotment is made with incorporation application in FiLLiP subject to maximum 2 DIN.
What is a Digital Signature Certificate? Who shall procure DSC for Limited Liability Partnership Registration?
Digital Signature Certificate for LLP is provided in the form of a token and issued by Certified Authorities. Any form filed for incorporation of Limited Liability Partnership (LLP) in India online shall be submitted after affixing the DSC of the designated partner.
Whether a place of office is required for online LLP registration?
Yes, the partners must provide a place of business in India with the required list of documents. It can be both – a residential or commercial plot. In most cases, the address is used for the communication purpose by the MCA and other concerned authorities and is also published on its portal.
What is LLP Agreement? Does it require filing with MCA?
LLP Agreement is an agreement executed by all partners after LLP incorporation in India. The agreement prescribes all the clauses related to business, including the rights, roles, duties, and responsibilities of partners in LLP. The agreement must be filed within 30 days of the issue of a certificate of incorporation. Failure to do so will charge an additional fee of ₹ 100 per day till the date of filing.
Can an LLP carry on more than one business activities?
Yes, a Limited Liability Partnership registered in India can carry on more than one business subject to their relevancy. The activities must be related or in the same field itself. Unrelated activities such as Interior Designing and Legal consultancy cannot be carried under same LLP. The business activities are mentioned in the agreement and must be approved from RoC.
Whether LLP can be registered for Not-for-profit activities?
No, one of the essential requirements for setting up LLP is ‘carrying on a lawful business with a view to profit’. Therefore, LLP cannot be incorporated for undertaking “Not-For-Profit” activities.
When can I get the PAN and TAN of the LLP?
The PAN and TAN used for the LLP formation can be applied once the Certificate of Incorporation of the Limited Liability Partnership is issued. The physical copy of the PAN will be received at the Registered Office once the same is dispatched by the Income Tax Department.
Whether Audit is mandatory after LLP registration in India?
Statutory audit in case of LLP registration depends on the turnover and contribution of the LLP. If the LLP turnover exceeds ₹ 40 lacs and/or the capital contribution exceeds ₹ 25 lacs, the financial statements must be audited by an eligible statutory auditor.
How Stamp Duty amount is decided for LLP Agreement? Whether notarization is necessary?
The amount of capital contribution is taken into consideration in deciding the stamp duty on the LLP Agreement in India. The rate of stamp duty varies from State to State. The State Stamp Act will be applied depending on where the registered office is situated. The amount of ₹ 500 is included in our package cost. Further, the Notary on the Agreement is not a statutory requirement and not required by the MCA. A notary can be required by the bank officials but is not mandatory for incorporation of an LLP.
What are the compliance requirements once LLP is registered?
Once online LLP registration completes, the partners must open a bank account in the name of LLP for business transactions. There is no additional requirement to be fulfilled. However, the partners must deposit the agreed amount to contribute as and when required. Furthermore, the annual compliance filing must be fulfilled every year upon LLP registration.
Whether a Body Corporate can be a Partner in the LLP?
Yes, a body corporate can be a Partner in an LLP. However, to fulfill the requirement of minimum Designated Partner, any of the two Partners or the nominee of the Body Corporate shall act as an authorized individual on behalf of the body corporate in the LLP.
Is Foreign Direct Investment (FDI) allowed in LLP?
Yes, Foreign Direct Investment (FDI) is allowed in LLP under the automatic route in the sectors allowed by the Foreign Investments Promotion Board (FIPB). However, Foreign Institutional Investors (Flls) and Foreign Venture Capital Investors (FVCIs) will not be permitted to invest in LLPs. LLPs will also not be permitted to avail External Commercial Borrowings (ECB.)
Can an existing partnership firm or company be converted to LLP?
Yes, an existing partnership firm or a company (unlisted) can be converted into LLP. There are many advantages to converting a partnership firm into an LLP.
What is the role of Accountants and Auditors in Limited Liability Partnership?
Daily transactions of the business are recorded in the Books of Accounts of the LLP by the Accountant/s. The Accounts hence recorded are verified by an Independent Auditor to make sure that no statutory compliance are missed and provide an Audit Report for the same.
(Note: TaxClue.co.in shall only take the accountability of the Accounting Service provided by them but however shall help in appointment of Independent Auditor for your business.)
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