Limited Liability Partnership (LLP) Registration | Finance Bazaar

About LLP Registration

LLP Company Registration Service is now possible with Finance Bazaar from anywhere in India. We are providing all business registration services in cheapest price without any hidden charges and on time registration. So, if you are interested to form Limited Liability Partnership Firm, then call us or mail us now to book your company name today. You can also talk with our chartered accountant if you have any query regarding company registration. There are no any charges for advice. Here you will also get brief introduction about LLP registration.

LLP was brought in India by way of the Limited Liability Partnership Act, 2008. The basic premise behind the introduction of LLP is to provide a form of business entity that is simple to maintain while providing limited liability to the owners. Since, LLPs have been well received with over 1 lakhs registration so far until September, 2014.

The main benefit of a Limited Liability Partnership over a traditional partnership firm is that in an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. It also provides limited liability safety for the owners from the debts of the LLP. Therefore, all partners in this company enjoy a form of limited liability protection for each individual's protection within the partnership, similar to that of the shareholders of a private limited company. However, unlike private limited company stockholder, the partners of an LLP have the right to manage the business directly.

Limited Liability Partnership is one of the simplest forms of business to incorporate and manage in India. With a simple compliance formalities and easy incorporation process, LLP is preferred by Professionals, Micro and Small businesses that are family owned or closely-held. Since, LLPs are not adequate of issuing equity shares, it should be used for any business that has plans for raising equity funds during its lifecycle.

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Required documents for LLP Registration

Registration Process Of LLP

Step 1: Digital Signature Certificate (DSC)

Before starting the process of registration, you must apply for the digital signature of the designated partners of the proposed LLP. This is because all the certificate for LLP are filed online and are required to be digitally signed. So, the designated partner must acquire their digital signature certificates from government recognized certifying agencies. Here is a list of such certified agencies. The amount of obtaining DSC varies depending upon the certifying agency.

Step 2: Director Identification Number (DIN)

You have to apply for the DIN of all the partners or those intending to be designated partner of the proposed LLP.

The application for allotment of DIN has to be made in Form DIR-3. You have to attach the scanned copy of documents (usually PAN and Aadhaar) to the form. The form shall be signed by a Company Secretary in full- time business of the company or by the Managing Director/Director/CEO/CFO of the existing company in which the applicant shall be appointed as a director.

Step 3: Name Approval

The LLP-RUN (Limited Liability Partnership-Reserve Unique Name) is registered for the reservation of name of proposed LLP which shall be processed by the Central Registration Centre under Non-STP. But before quoting the name in the form, it is urged that you use the free name search facility on MCA portal. The system will provide the list of closely resembling names of LLPs/existing companies based on the search criteria filled up.

This will assist you in choosing names not similar to already existing names. The registrar will approve the name only if the name is not unregistered in the opinion of the Central Government and does not resemble any existing partnership firm or a body corporate or a trademark. The form RUN-LLP has to be lead with fees as per Annexure ‘A’ which may be either approved/rejected by the registrar. A re-submission of the form shall be allowed to be made within 15 days for rectifying the defects. There is a arrangement to provide for 2 proposed names of the LLP.

Step 4: Incorporation of LLP

• The form used for incorporation is FiLLiP (Form for incorporation of Limited Liability Partnership) which shall be filed with the Registrar who has a jurisdiction over the state in which the registered office of the LLP is situated. The form will be an integrated form.
• Fees as per Annexure ‘A’ shall be paid.
• This form also provides for applying for allocation of DPIN, if an individual who is to be appointed as a designated partner does not have a DPIN or DIN.
• The application for allocation shall be allowed to be made by two individuals only.
• The application for reservation can be made through FiLLiP too.
• If the name that is used for is approved, then this approved and reserved name shall be filled as the proposed name of the LLP

Step 5: File Limited Liability Partnership Agreement

LLP agreement governs the mutual duties and rights amongst the partners and also between the LLP and its partners.

• LLP agreement must be filed in form 3 online on MCA Portal.
• Form 3 for LLP agreement has to be register within 30 days of the date of incorporation.
• The LLP compliance has to be printed on Stamp Paper. The amount of Stamp Paper is different for every state.

LLP vs Partnership Firm in India

Partnerships certified under the Partnership Act, 1932 used to be a very popular form of Business Entity in India due to the simplicity of registration and ease of maintenance. In India through the Limited Liability Partnership Act, 2008, the prominence of Partnership’s has been replaced by the LLPs. It is easy to register, offer a range of benefits to the promoters and is easy to maintain, making it ideal for many small and medium sized business that would otherwise opt to begin as a Proprietorship or a Private Limited Company. In this article, we will cover the various aspects of LLP vs Partnership in India:

The Entity

Partnership:- Partnerships are registered under the Partnership Act, 1932. The partners of a Partnership certified under the Partnership Act, 1932 are personally liable for an unlimited amount of Partnership liabilities. Hence, the Partners and the partnership firm are not considered separate legal entities, neither does the Partnership have perpetual existence.

Limited Liability Partneship:- LLPs are registered under the Limited Liability Partnership Act, 2008. The Partners of it is not liable for the liabilities of the Partnership and the liability of a Partner is limited to the amount of his/her capital contribution to the LLP. Therefore, the LLP and the Partners of an LLP are treated to be separate legal entities and the it has a perpetual existence, until dissolved by the Promoters.

The share of an LLP can be moved. However, the Transferee is not allowed to become a Partner automatically. The share also can be moved to another person more easily. An LLP can be transformed into a Private Limited Company or a Limited Company easily.

Limited Liability Partnerships are registered with the Ministry of Corporate Affairs. LLP registration method is similar to that of a Private Limited Company Incorporation process, viz. obtaining Designated Partner Identification Number (DPIN) for the Partners, obtaining Digital Signature Certificate for the Partners, obtaining name approval from MCA, obtaining Incorporation Certificate and filing LLP Agreement.

Number of Partners & Requirement

Partnership:- Any Indian National residing in India can be a Partner in a Partnership Firm including minors. A Partnership Firm should have at least 2 Partners and can only have a maximum of 20 Partners. The Partnership Deed defines such as Management of the Firm and one or more Partners can be designated to manage the Partnership Firm.

The share in a Partnership can be moved to another person after obtaining the permission of all the Partners in a Partnership. The transferability of a Partnership is cumbersome. Partnership may be converted into an LLP or a Private Limited Company, through a lengthy process.

Limited Liability Partnership:- Any Indian National residing in India can be a Partner in LLP. Foreign Direct Investment is grant in it with prior RBI approval. Minors are not allowed to be part of a limited liability partnership. It should have at least 2 Partners and is allowed to have unlimited Partners. The Agreement governs form of management of an LLP and one or more partners can be designated to manage the activities of the LLP.

Compliance & Taxation

Partnership:- The earnings of a Partnership firm are taxed at 30% + educational cess. There are no annual return filing conditions for a Partnership firm.

Limited Liability Partnership:- The earnings of an LLP are taxed at 30% + educational cess. It should file annual return with the Ministry of Corporate Affairs (MCA).

Registration

Partnership:- Partnership firms are certified with the Registrar of Firms. A Partnership Deed must be formulated for registering the Partnership firm with the Registrar of Firms. Finance Bazaar can register your Partnership Firm for Rs.6,999/-

LLP

Uninterrupted Existence

An LLP has 'perpetual succession', that is existence or continued until it is legally dissolved. An LLP being an independent legal person, is unaffected by the death or other departure of any Partner. Hence, it continues to be in presence irrespective of the changes in ownership.

Easy Transferability

The ownership of a Limited Liability Partnership can be easily transferred to another person by inducting them as a partner of the LLP. It is an independent legal entity separate from its Partners, so by changing the Partners, the ownership of the LLP can be changed.

Audit NOT Required

An LLP does not need audit if it has less than Rs. 40 lakhs of turnover and less than Rs. 25 lakhs of capital donation. Therefore, it is ideal for small businesses and startups that are just starting their operations and want to have minimal regulatory compliance related formalities.

Owning Property

An LLP being an artificial judicial human, can acquire, own, enjoy and sell, property in its name. No Partner can make any demand upon the property of it - so long as the LLP is a going concern.