Before we know about the procedure of LLP registration, we need to know what LLPs is.
In general terms, LLP means Limited liability partnership. A limited liability Partnership is considered as a partnership in which some or all partners have limited liability. LLP is a body corporate formed and incorporated under the Limited Liability Partnership Act, 2008. It is a legal entity separate from its partners.
In this blog, we discuss what is LLP, features, advantages and all other necessary aspects of LLP?
What is LLP all about?
Limited liability partnership is a combination of both corporation and partnership, each partner is not responsible or liable for the misconduct of another partner’s. It’s an alternative corporate business form which gives the benefits of limited liability of a company and the flexibility of a partnership. Limited liability partnership is a legal entity that liable for the full extent of its assets. In LLP, the liability of partners is limited. In India, it was introduced in April 2009.
Salient features of LLP
List of the features of Limited liability partnership is listed below:
- A body corporate – As per section 3 of the Limited Liability partnership act, 2008, LLP is a body corporate formed and incorporated under the Act. It is a legal entity separate from its partners.
- Perpetual Succession – LLP can continue its existence even after the retirement, death, and insolvency of one or more partners.
- Separate Legal entity – LLP is a separate Legal entity and it is completely liable for its assets.
- Artificial Legal Person – For all legal purposes, LLP is an artificial legal person. It is created by a legal process and has all the rights of an individual.
- Management of Business – The partners of LLP can manage its business. However, only the designated partners are responsible for legal compliances.
What are the advantages of LLP?
The list of the advantages of LLP is given below:
- Non-requirement of Minimum contribution – There is no need of minimum capital requirement in LLP. LLP can be formed with the least possible capital.
- No limit on owners and partners- Limited liability partnership needs a minimum number of 2 partners, however, there is no limit on the maximum number of partners.
- Lower registration cost – The cost of Limited liability partnership registration is low as compared to the cost of incorporating a private limited company or a public limited company.
- Non-requirement of compulsory audit – All companies like private and public companies are required to get their accounts audited. But, in case of LLP, there is no mandatory requirement of compulsory audit
- Easy to dissolve – It is so easy to dissolve an LLP.
- Exempt from Taxation – Limited liability partnership is exempted from various taxes such as dividend distribution tax and minimum alternative tax. The rate of tax on Limited liability partnership is less than as compared to the company.
Procedure for Registration of LLP:
- Procure Digital Signature Certificate – Every form or application requires to be signed digitally by the applicants and partners of the LLP. Digital Signature Certificate with the validity of 2 years is procured for the designated partners of the Limited liability partnership. Digital Signature Certificate needs to be associated with the PAN card of the applicant.
- Director Identification Number – You have to apply for the Director Identification Number of all the designated partners or those who intend to be designated partner of the proposed LLP. In the application for allotment of Director Identification Number, scanned copy of documents like aadhaar and pan card has to be attached.
- Reservation of name – Next step is reservation of name. LLP reserve unique name requires to be filed for the reservation of name of proposed Limited liability partnership which shall be processed by the Central Registration Centre
- Filing of Incorporation form of LLP – Form used for incorporation of LLP shall be filed with the registrar who has jurisdiction over the state in which registered office of the LLP is situated.
- Filing and drafting of LLP agreement – The next step is to draft LLP agreement carefully. The name, business, object, place of business and all other details of Limited liability partnership will require to be placed in the agreement.
Documents required for LLP Registration:
- PAN card of the partners.
- Utility bill of the proposed registered office
- No objection certificate from the landlord, if any
- Residence proof of the partners
- Digital Signature Certificate.
- Photograph of the partners
- Passport of the partners (in case of foreign nationals/NRIs)
Enterslice provides best service in matter of LLP registration. Keep in touch with one of its consultant to get best service of Limited liability partnership registration within a reasonable time.