LLP was introduce first time in India in 2008 under the Limited Liability Partnership Act, 2008. The core benefit of Limited Liability Partnership is liability of partner is limited up to the ratio undertaken by them at the time of registration of LLP hence one partner is not answerable for another partner’s wrongdoings or negligence. LLP is popular amongst professional, Information Technology Business, MSME’s, Family-owned Business.
Limited Liability partnership offers the benefit of such as minimal maintenance with feature of Private Limited Company or Public Limited to its owners. The partners of a limited liability partnership firm have limited liability towards its creditors. In case of default, banks/creditors can only sell the LLP’s assets and not the personal assets of Partners. The Person who is partner in LLP is called Designated partner and for registration of LLP minimum two Designated Partner required. Only Individual Natural Parson can be Designated Partner of LLP. However Designated Partner can be of any nationality but one partner out of two should be resident of India and at least 182 days stay in India in last calendar year. LLP Registration can be done through SetyourBiz.com across India including Delhi NCR, Mumbai, Bengaluru, Chennai.
1. Advantage of Company and a Partnership. Owner of LLP enjoys feature of partnership firm and befit of limited liability of companies due to these two feature LLP is popular among small business feature.
2. Separate Legal entity since LLP is a legal person created by law have its own identity death or incapacity of partners not going to affect LLP it will continue in operation with new partner.
3. Low cost for registration and maintained as compare to companies LLP also enjoy benefit of law cost at time of formation because of there is no stamp duty payable to state government at the time of registration.
4. Less yearly compliance and regulation as per LLP Act, 2008 only two returns have to file in a financial year.
5. Small Capital Requirement while choosing business structure as LLP Registration no need to worry as there is minimum capital requirement of rupees 10,000.
6. Not any partner will be responsible for the act or misconduct of other partners.
7. Minimum people required for formation of LLP is two and the individual who form the LLP is called Designated Partner and such designated partner must be Individual with valid DPIN.
Registering a private limited company has various advantages compared to a partnership firm or LLP as under:
Step 1 Raise: Apply and obtain Digital Signature Certificate of Designated Partner:- Before starting the process of LLP registration, you must apply for the digital signature Certificate in the name of proposed partners of LLP. Digital signature is necessary because of process of registration of LLP is online and during the process various form and document need to sign digitally . So, application to issue of digital signature must be filed and obtain by the designated partner from government registered certifying agencies. Here is a list of Government registered certified agencies.
Step 2: Director Identification Number (DIN) or DPIN ( Designated Partner Identification Number) On successfully obtain digital signature certificate the next step is to apply for DPIN or DIN to appoint as Designated Partner in proposed LLP. As per LLP Act, 2008 any one wish to appoint Designated Partner in the LLP must have valid DIN or DPIN. One can obtain DIN or DPIN by filing online application in e-form DIR-3 and it issued by Ministry of Corporate Affairs (MCA) in 2-3 working days. In DIN or DPIN application you have to attached in form self-attested copy of Aadhaar and PAN in case of applicant is resident of India and in case of non-resident Copy of Passport and Identity Proof. Passport copy and Identity proof must be apostille in case of non-resident applicant.
Step 3: Application for Name reservation (RUN-LLP) A online form name LLP-RUN(Limited Liability Partnership-Reserve Unique Name) is submit for the name reservation of proposed LLP. On submission of name application successfully it is processed by Central Registration Centre (CRC). CRC is Government designated authority whose primary work is reservation of name and issue certificate of incorporation for LLP or Companies. LLP-RUN is non-STP form so it takes 1-2 working days to approve or reject. We can apply two name at one time in form LLP-RUN But before filing the name application in form LLP-RUN one must check and verify the availability name of proposed LLP, it can be done by using name search facility on MCA portal. You can find on this portal name of list of companies or LLP’s whose name is closely resembles with the name of proposed LLP. This facility of MCA portal help you in choosing correct names not similar to already existing Companies or LLP’s. The Central Registration Centre will approve the name only if the name is as per name guideline issued under the LLP Act, 2008 and must not be undesirable in the eye of the registrar of name and does not resemble with any existing LLP or Company or a registered trademark.
Step 4: Incorporation of LLP 1. On the approval of name application (RUN) form for registration of LLP need to file online on MCA portal. E- form FiLLiP used for registration LLP which need to file after signing it digitally using the digital signature of the purposed designated partner of LLP. E-form FiLLiP is an integrated form one can apply Director Identity Number (DPIN or DIN)for individuals who does not have DIN and wants to appoint as designated partner in proposed LLP. However, you can apply one two DIN or DPIN in this form and if in your LLP is more then two designated partners then you have to follow separate DIN or DPIN process using form DIR-3 as mentioned in step 3. 2. Since LLP registration form FiLLiP is integrated you can apply name of proposed LLP in one application. 3. A Online Fees for LLP Registration need to paid as per the LLP Act, 2008. However fee for registration of LLP is depends on purposed capital of LLP.
Step 5: Drafting and filing of Limited Liability Partnership Agreement One the issue of Certificate of Incorporation after filing form FiLLiP an agreement need to prepare and file on MCA portal online in form LLP-3. This form need to file within 30 days form the date of registration of LLP if you fail to file form LLP-3 you have to bear penalty of Rupees 100 per day from the last date of default. LLP Agreement has to print on the physical Stamp Paper and must be notarised as per Indian Notary Act. The value of Physical Stamp Paper is different for every state so one must take advice before getting LLP agreement signed and stamp.
Here is a list of documents required for incorporation of LLP:
Document for Designated Partners:-
1. PAN Card Designated of Partners – All the designated partners are needs to provide their self-attested copy of PAN at the time of incorporation of LLP. PAN card acts as a main ID proof for Indian resident.
2. ID Proof of Designated Partners – Designated Partners can submit self-attested anyone document as ID proof out of Voter’s ID, Passport, Driver’s license or Aadhar Card.
3. Address Proof – Designated Partners need to submit their address proof and those can be any one form these Bank statement, Electricity Bill, Telephone Bill, Mobile Bill. Note address proof should be latest one and should not older than two months.
4. Passport Size colour Photo preferred with white background.
Document for Designated Partners in case of Non-resident :-
1. Apostille or Notarised true copy of Passport of as per the law applicable in applicant’s country.
2. Apostille or Notarised true copy of Resident ID proof issued by Government of applicant’s country.
3. Passport Size colour Photo preferred with white background.
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Registered Office Address proof.