• slide1
    We Provide
    Best Solution
    For You
    Exhaustive technology of implementing multi purpose projects is putting your project successful.

Limited Liability Partnership

The Limited Liability Partnership Act, 2008 was enacted by the Parliament of India to introduce and legally sanction the concept of LLP in India. Unlike the general partnerships in India, LLP is a body corporate and legal entity separate from its partners, have perpetual succession and any change in the partners of a LLP shall not affect the existence, rights or liabilities of the LLP.

Steps To Register A LLP

To register a Indian LLP, you need to first apply for a Designated Partner Identification Number (DPIN), which can be done by filing eForm for acquiring the DIN or DPIN. You would then need to acquire your Digital Signature Certificate and register the same on the portal. Thereafter, you need to get the LLP name approved by the Ministry. Once the LLP name is approved, you can register the LLP by filing the incorporation form.

Step 1

Application for DIN or DPIN:

All designated partners of the proposed LLP shall obtain “Designated Partner Identification Number (DPIN)”. You need to file eForm DIR-3 in order to obtain DIN or DPIN. In case you already have a DIN (Director Identification Number), the same can be used as a DPIN.

Step 2

Acquire/ Register DSC:

The Information Technology Act, 2000 provides for use of Digital Signatures on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. This is the only secure and authentic way that a document can be submitted electronically. As such, all filings done by the LLP(s) are required to be filed with the use of Digital Signatures by the person authorised to sign the documents.

Acquire DSC -A licensed Certifying Authority (CA) issues the digital signature. Certifying Authority (CA) means a person who has been granted a license to issue a digital signature certificate under Section 24 of the Indian IT-Act 2000.

Register DSC - Role check can be performed only after the signatories have registered their Digital signature certificates (DSC) with LLP application.

Step 3

New User Registration:

To file an eForm or to avail any paid service on LLP portal; you are first required to register yourself as a user in the relevant user category, such as registered and business user. To register now click New User Registration

Step 4

Incorporate a LLP:

Apply for the name of the LLP to be registered by filing Form 1 [zip](208KB) (Application for reservation or change of name) for the same. After that depending upon the proposed LLP, file required incorporation Form 2 [zip](681 KB) ( Incorporation document and Subscriber’s statement)

Once the form has been approved by the concerned official of the Ministry, you will receive an email regarding the same and the status of the form will get changed to Approved. To know more about e-Filing process click "All About e-Filing"

Step 5

File LLP Agreement :

After incorporation of LLP, an initial LLP agreement is to be filed within 30 days of incorporation of LLP. The user has to file the information in Form 3 ( Information with regard to Limited Liability Partnership Agreement and changes, if any, made therein).

Documents Required for LLP Registration

• FOLLOWING DOCUMENTS THAT SHOULD BE SUBMITTED BY PARTNERS

  • 1. Scanned copy of PAN Card or Passport (Foreign Nationals & NRIs)
  • 2. Scanned copy of Voter's ID/Passport/Driver's License
  • 3. Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
  • 4. Scanned passport-sized photograph Specimen signature (blank document with signature [partners only])
FOR THE REGISTERED OFFICE
  • 1. Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
  • 2. Scanned copy of Notarised Rental Agreement in English
  • 3. Scanned copy of No-objection Certificate from property owner
  • 4. Scanned copy of Sale Deed/Property Deed in English (in case of owned property)
Factors to Consider While Selecting an LLP Name
  • Think wisely while choosing your name of the LLP keeping in mind that every business you incorporate with a vision of long term growth.
  • Easy to spell and remember
  • Short & simple
  • Unique: One can use prefix to make the name distinct from others
  • Meaning: The name should be such that it helps people to connect with the LLP and its branding and help to establish a Brand and Trademark.
  • The name should not be such that it is offensive to any religion, caste, race, community, group, society etc.
  • It should not be opposed to public policy.
  • It should not include any word that can lead to the impression that the entity is having any connection or association with Local/ State/ Central Government.
  • The name should not be similar with any existing company/ LLP and also with any Trademark. However, if you are willing to reserve same name, you can apply the same with the consent of owner by submission of NOC.
  • Not to include any word, prohibited by the Government or any under any law prevailing in India.
  • Always try to provide maximum six names to your professional to seek the best advice on choosing the name for your LLP.
  • Requisite of Approval: Names which include words such as ‘Finance’, ‘Bank’, ‘Insurance’, ‘Mutual Fund’, etc., the in-principle approval of concerned Regulatory such as SEBI, RBI, IRDA, etc. is required to be submitted along with the name approval application.

Need for LLP

F For a long time, a need has been felt to provide for a business format that would combine the flexibility of a partnership and the advantages of limited liability of a company at a low compliance cost. The Limited Liability Partnership format is an alternative corporate business vehicle that provides the benefits of limited liability of a company but allows its members the flexibility of organizing their internal management on the basis of a mutually arrived agreement, as is the case in a partnership firm. This format would be quite useful for small and medium enterprises in general and for the enterprises in services sector in particular. Internationally, LLPs are the preferred vehicle of business particularly for service industry or for activities involving professionals. An LLP is similar in some ways to a standard Partnership, except that the individual members have lower liabilities to any debts which may arise from running the business. There are more administrative duties involved compared to the Partnership business structure.

In fact, an LLP is more similar to operating a Limited Company. In terms of liability, the Limited Liability Partnership is itself liable for debts run up in running the business, rather that the individual members of the LLP. As a result, LLP's are only recommended for profit running businesses. Individuals or existing businesses can be members of a Limited Liability Partnership, and the LLP must have at least 2 members. The rights and responsibilities of all members would usually be laid out in a "Deed of Partnership". The LLP would typically select a "Designated Member" who would be responsible for maintaining communications with Companies House, preparing accounts and acting for the LLP if for some reason it is dissolved further down the line.

Minimum Requirements for LLP Registration

• Two Partners:

All LLPs must have at least two partners, There is no limit to the maximum number of partners

• Indian Resident:

Of the partners in the business, at least one must be a resident of India.

• Minimum Capital Contribution:

There is no minimum capital requirement for an LLP (or a company, for that matter). The LLP should have an authorized capital of at least Rs. 1 lakh.

• Registered Office:

The registered office of an LLP does not have to be a commercial space. Even a rented home can be the registered office, so long as an NoC is obtained from the landlord.

Salient Features

LLP Agreement

Any written agreement between the partners of the LLP or between the LLP and its partners which determines the mutual rights and duties of the partners and their rights and duties in relation to that LLP. It is not necessary to enter into an LLP agreement as per LLP Act, 2008. In the absence of LLP agreement, the mutual rights of corporate, at least two individuals who are partners of such limited liability partnership or nominees of such bodies corporate shall act as designated partners.

Accounts and Audit

LLP is required to maintain books of accounts for each year on cash basis or on accrual basis. Accounts shall be audited by Auditors appointed by the LLP. Audit of accounts is compulsory if turnover exceeds Rs. 40 lakhs in any financial year or contribution by partners exceeds Rs. 25 lakhs. The Statement of Accounts and Solvency for the year ended 31 March is required to be filed with the Registrar before 30 October in each year.

Penalty

Any person guilty of an offence under this Act for which no punishment is expressly provided shall be liable to a fine which may extend to five lakh rupees but which shall not be less than five thousand rupees and which may extend to fifty thousand rupees for every day after the first day after which the default continues.

Taxation of a Limited Liability Partnership

LLP registered in India will be a resident even if only a part of control and management is in India. Profits distributed by LLP exempt in the hands of the partners. As per the Finance Bill, 2009, the income of an LLP is taxed only the hands of LLP and not the Partners. The entire taxation of LLPs is similar to the existing taxation pattern applicable to Partnerships registered and formed under The Indian Partnership Act, 1932. Dividend distribution tax is not applicable in case of LLPs, whereas it is 15.00%(plus surcharge @ 5% plus education cess @ 2% plus SHEC @ 1% of amount so declared, distributed or paid) in case of companies. Wealth Tax (which is currently @ 1%) is not applicable to LLPs.

Filing Procedure for LLPs

For income tax purposes, the filing procedure of an LLP is similar to that of a partnership. The precedent partner reports the capital contribution of the partners in the tax return for the purposes of applying the relevant deduction restriction.
img

EASY TO WIND-UP

Not only is it easy to start, it’s also easier to wind-up an LLP, as compared to a private limited company. While it still takes two to three months to complete this process, it can take over a year to close a private limited company.

FAQs

Any existing partnership firm that is willing to get converted into LLP will need to apply through Form 17 (Application and statement for the conversion of a firm into LLP. Form 17 needs to be filed along with Form 2 (Incorporation document and Subscriber’s statement).
Any private company/ unlisted public company that is willing to get converted into LLP need to apply through Form 18 (Application and Statement for conversion of a private company/ unlisted public company into limited liability partnership (LLP)). Form 18 needs to be filed along with Form 2 (Incorporation document and Subscriber’s statement).
Any Foreign LLP can establish its place of business in India by filling Form 27 (Registration of particulars by Foreign Limited Liability Partnership (FLLP)). The eForm has to be digitally signed by authorized representative of the FLLP.There is no mandatory requirement to apply and obtain DPIN or DIN for Designated Partners of FLLP but the DSC of the authorized representative is mandatory.
The LLP shall be a body corporate and a legal entity separate from its partners. Any two or more persons, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filing the same with the Registrar, form a Limited Liability Partnership.
Every LLP shall be required to have at least two Designated Partners who shall be individuals and at least one of the Designated Partner shall be a resident of India. In case of a LLP in which all the partners are bodies corporate or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.
Every Designated Partner would be required to obtain a “Designated Partner’s Identification Number” (DPIN) on the lines similar to “Director’s Identification Number” (DIN) required in case of directors of companies apply for application of DPIN as provided in Form 7.
BACK TO TOP