What is Limited Liability Partnership
A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner’s misconduct or negligence.
Digital Signature & DPIN of 2 Directors
We will draft your Company Constitution (Agreement)
PAN & TAN for your Firm
Compliance with applicable laws
Document required for LLP Registration:
Documents of Directors for DPIN
- Self attested copy of PAN Card or Passport/Voter ID/ Driving License
- Self attested copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
- Scanned passport-sized photograph
- Specimen signature
FOR THE REGISTERED OFFICE
- Notarised Rental Agreement in English (in case of rented property)
- No-objection Certificate from property owner (in case of rented property)
- Sale Deed/Property Deed in English (in case of owned property)
- Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
Advantage Of LLP Registration
Following reasons can help you decide, why you should go for an LLP:
- Renowned form of business:
Though the concept of Limited Liability Partnership has been recently introduced in India but it is very known concept in other countries of the world especially in service sector.
- Easy to Form:
It is very easy to form LLP, as the process is very simple as compared to Companies and does not involve much formality. Also the cost of registering and maintaining a LLP is very Low.
- Body Corporate:
Just like a Company, LLP is also body corporate , which means it has its own existence as compared to partnership. LLP and its Partners are distinct entity in the eyes of law. LLP will know by its own name and not the name of its partners.
A LLP exists as a separate legal entity from your personal life. Both LLP and person, who own it, are separate entities and both functions separately. Liability for repayment of debts and lawsuits incurred by the LLP lies on it and not the owner. Any business with potential for lawsuits should consider incorporation; it will offer an added layer of protection.
- Perpetual Succession:
An incorporated LLP has perpetual succession. Notwithstanding any changes in the partners of the LLP, the LLP will be a same entity with the same privileges, immunities, estates and possessions. The LLP shall continue to exist till its wound up in accordance with the provisions of the relevant law.
- Flexible to Manage:
LLP Act 2008 gives LLP the at most freedom to manage its own affairs. Partner can decide the way they want to run and manage the LLP, in form of LLP Agreement. The LLP Act does not regulated the LLP to large extent rather than allows partners the liberty to manage it as per their will and fancies.
- Easy Transferable Ownership:
It is easy to become a Partner or leave the LLP or otherwise it is easier to transfer the ownership in accordance with the terms of the LLP Agreement.
- Separate Property:
A LLP as legal entity is capable of owning its funds and other properties. The LLP is the real person in which all the property is vested and by which it is controlled, managed and disposed off. The property of LLP is not the property of its partners. Therefore partners cannot make any claim on the property in case of any dispute among themselves.
Another main benefit of incorporation is the taxation of a LLP. LLP are taxed at a lower rate as compared to Company. Moreover, LLP are also not subject to Dividend Distribution Tax as compared to company, so there will not be any tax while you distribute profit to your partners.
- Capacity to sue:
As a juristic legal person, a LLP can sue in its name and be sued by others. The partners are not liable to be sued for dues against the LLP.
- Partners are not agent of other Partners:
In LLP, Partners unlike partnership are not agents of the partners and therefore they are not liable for the individual act of other partners in LLP, which protects the interest of individual partners.
As compared to a private company, the number of compliances are on lesser side in case of LLP.
Frequently asked question:
1) What are the Rights and Duties of Partners?
Mutual rights and duties of the members are governed by the agreement between the partners or between the LLP and its partners subject to the provisions of the LLP Act 2008. The act provides flexibility to devise the agreement as per their choice. In the absence of any such agreement, the mutual rights and duties shall be governed by the provisions of proposed the LLP Act.
2) What does Limited Liability means?
The LLP will be liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature.
No partner would be liable on account of the independent or un-authorized actions of other partners or their misconduct. The liabilities of the LLP and partners who are found to have acted with intent to defraud creditors or for any fraudulent purpose shall be unlimited for all or any of the debts or other liabilities of the LLP;
3) Whether there would be any requirement of ‘identification number’ of Designated Partner for LLP registration?
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.
4) Can I convert my firm/private company/unlisted company into LLP?
Yes, A firm, private company or an unlisted public company is allowed to be converted into LLP in accordance with the provisions of the Act. On and from the date of registration specified in the certificate of registration, all tangible (moveable or immoveable) and intangible property vested in the firm or the company, all assets, interests, rights, privileges, liabilities, obligations relating to the firm or the company, and the whole of the undertaking of the firm or the company, shall be transferred to and shall vest in the LLP without further assurance, act or deed and the firm or the company, shall be deemed to be dissolved and removed from the records of the Registrar of Companies;
5) How can a person become partner of an LLP?
Persons, who subscribed to the “Incorporation Document” at the time of incorporation of LLP, shall be partners of LLP. Subsequent to incorporation, new partners can be admitted in the LLP as per conditions and requirements of LLP Agreement.
6). How can an existing partner cease to be a partner of an LLP?
A person may cease to be a partner in accordance with the agreement or in the absence of agreement, by giving 30 days notice to the other partners. Notice is required to be given to ROC when a person becomes or ceases to be partner or for any change in partners.
7) Whether every LLP would be required to maintain and file accounts?
An LLP shall be under obligation to maintain annual accounts reflecting true and fair view of its state of affairs. The Statement of Account & Solvency essentially signed by the designated partners, is to be filed within 30days from the six months from the closure of the respective financial year.
8) Whether any Annual Return would be required to be filed by an LLP?
Every LLP would be required to file Annual Return with ROC. A duly authenticated Annual Return in prescribed form, is to be filed with the Registrar, together with the prescribed fee, within a period of 60 days from the closure of every financial year.
9) Which documents are available for public inspection in the office of Registrar?
The following documents/information will be available for inspection by any person on payment of prescribed fees:-
- Incorporation document
- Names of partners and changes, if any, made therein
- Statement of Account and Solvency
- Annual Return