The Entire Concept of An LLP Registration

Because it combines the benefits of partnership business and a corporation into a single structure, the LLP is a popular option among entrepreneurs. A Limited Liability Partnership mixes the benefits of a partnership and a limited liability business. It began in India in January 2009 and immediately became popular among businesses and professional services. The LLP was formed with the intention of establishing a simple organizational framework that would benefit shareholders by minimizing their liability.

What is a Limited Liability Partnership?

A Limited Liability Partnership Business is a kind of partnership firm that is corporate in nature. LLP stands for Limited Liability Partnership. 2 or more partners can form a Limited Liability Partnership. In an LLP, 1 partner is not liable or responsible for another partner's misconduct or negligence. An LLP has all of the qualities of a regular partnership business, with the exception of the same legal body status and the partners' unlimited liability. As a result, LLPs exist legally and have a distinct identity from their participants. Moreover, its partners are only partially accountable.

Reasons for Choosing LLP Incorporation

In addition to partnership businesses, the LLP type is available. It is a corporate business vehicle that allows its members to structure their internal governance on the basis of mutual agreement, identical to a partnership company. It has several features, including the following:

Liability is limited

The partners' culpability must be restricted to the number of their donations to the firm. In other terms, they are not individually responsible to creditors outside of the company.

Simplicity

In comparison to the creation and operation of a Private Company, the formation & operation of an LLP is extremely simple.

Existence indefinitely

An LLP is a legal entity that operates independently of its partners, which may change over time.

Minimum Number of Partners

A limited liability partnership (LLP) incorporation can be done with as few as two participants.

Legal Entity Separate

It is a distinct legal body that can possess property in its own name & is completely liable for its obligations.

Partners in an unlimited number

Limited liability partnership businesses can have an infinite number of partners.

Eligibility for LLP Registration

The eligibility for LLP registration is as follows:

Minimum Partners Required

A Limited Liability Partnership or LLP must be formed with a minimum of two partners in India.

Partner from India

One of the partners should be of Indian descent. This is a legal requirement for LLPs in India.

DPIN Code

The partners of an LLP must all receive a unique partnership identification number.

Permanent/Physical Office Address

This is a requirement under the Limited Liability Partnerships Act of 2008. The LLP must have a physical address for a registered office address from which it may conduct day-to-day business.

All Partners' DSC

All LLP partners are required by law to get a Certificate of Digital Signature. This would make it easier to file digital and electronic paperwork and signatures.

Inventive Company Name

Your company's name should be distinct and one-of-a-kind. The proposed company name should be distinct from any existing registered Indian firms or trademarks.

Benefits of LLP Registration

The below-mentioned are some of the benefits of LLP registration in business:

  • The personal assets of partners are shielded from limited liability.
  • LLPs have a higher reputation and trustworthiness than regular businesses.
  • In comparison to the company, compliance requirements are simple.
  • There is no requirement for an audit until a particular quantity of yearly revenue is reached.
  • Business continuity is maintained, although partners may come and go.
  • There is no need for the minimum funds contribution.

LLP Incorporation Process

The process of an LLP Incorporation involves the following steps in it. The steps are as follows:

Name Reservation

The applicant must get an LLP-Reserve Unique Name (LLP-RUN) that may be executed at the Central Registration Centre in order to establish a prospective LLP. However, before mentioning or using the name, it is always recommended that you check for a free name on the Ministry of Corporate Affairs web. This will give a list of firms with names that are the same or similar to the proposed LLPs. Once a name has been selected, the registrar will accept it as long as it is not too close to any existing LLP.

Obtaining DSC

Certified government entities such as the National Informatics Center, IDRBT Certifying Authority, E-MUDHRA, CDAC, and NSDL can provide the requisite digital signatures. The cost of obtaining a DSC will be determined by the certifying agency to whom the applicant has applied.

LLP Incorporation

For LLP incorporation, a form for incorporation of LLP (FiLLiP) must be filled out and submitted to the registrar. Fees must be paid in accordance with Annexure 'A.' Only two people will be allowed to apply for an allocation.

Filing of an LLP Agreement

This agreement covers the partners' mutual rights and obligations. The agreement can be entered electronically in Form 3 on the MCA Portal. Form 3 for LLP agreement must be filed within thirty days of establishment. The LLP Agreement must be published on Stamp Paper, which is different in each state. It takes around 15 days to receive DSC & Form 3, depending on the availability of required papers.

Documents

The documents that are needed to be presented are as follows:

For LLP Partners

  • Photo
  • Aadhaar Card
  • PAN Card
  • Identity Proof
  • Residence Proof

Proof of an LLP Registered Office

  • Utility Bills
  • Rent Agreement
  • Bank Statements
  • Driving License
  • No Objection Certificate if rented property

For Foreign Nationals

  • Foreign nationals & NRIs must have a passport.
  • They must also present address proof, which might be a driver's licence, bank statement, residency card, or any other Government-issued identity verification with an address.
  • A stamped or apostilled translation copy will be provided if the papers are not in English.

Conclusion

LLP incorporation is common among service and professional firms such as Chartered Accountants, Company Secretaries, Management Consulting Firms, Recruiting Firms, and other service-based enterprises.


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