LLPs can be a much more advantageous business vehicle than a regular partnership because they eliminate excessive regulations of the Indian Partnership Act, 1932, which affect partnerships with personal liabilities. Further, the company is tax-efficient, does not require an audit below a certain amount, does not limit the number of partners or requires capital contributions.
Benefits of a Limited Liability Partnership
Separate Legal Entity
- An LLP is a separate legal entity from its partners. If a situation arises, both partners can sue each other.
- It remains in business regardless of whether the partners leave, as it follows perpetual succession. To dissolve, the firm must agree on a term of dissolution.
Transferring the ownership of LLP is simple. Designated partners can quickly take ownership of the company after being inducted.
Suitable For Small Business
- Audits are not needed by LLPs with capital under 25 lakhs and turnover under 40 lakhs per year. Startups and small businesses benefit from registering as LLPs.
- Since an LLP is recognized as a legal entity, it can own or acquire property. The partners cannot claim ownership of the property.
No Owner /Manager Distinction:
LLPs are owned and managed by partners. Unlike a private limited company, whose directors may not be shareholders, this company is governed by the board of directors. The LLP structure is therefore not attractive to venture capitalists
Process To Register LLP in India
Listed below is the process to register an LLP in India. service provider who provides a hassle-free, seamless, and quick process. Check here so that you know the quick and detailed process of registering an LLP.
Step 1: Get your DSC (Digital Signature Certificate)
Step 2: Request a Director Identification Number (DIN)
Step 3: Approval of the name
Step 4: Establishing the LLP
Step 5: A Limited Liability Partnership (LLP) agreement must be filed
LLP Registration Documents
To conversion of firm into LLP, the following documents are required:
Partners to submit proposals
- (Foreign Nationals & NRIs) Scanned copies of PAN Cards & Passports
- Copies of Aadhar cards, voter IDs, passports, and driver’s licenses
- Please provide a scanned copy of the most recent bank statement, telephone or mobile bill, or electricity/gas bill
- Specimen signature (blank document with signature [for partners only]) Scanned passport-sized photo
- Unless they are in a Commonwealth country or a non-Commonwealth country, foreign nationals and NRIs must attest the first three documents themselves or have them notarized.
- Recent bank statement, cell phone bill, electricity bill, or gas bill
- English rental agreement scanned and notarised
- Certificate of No-objection from the owner scanned
- In case of owned property, scan of sale agreement/property deed in English.
1. What is a Limited Liability Partnership?
LLPs are alternative corporate business forms that combine a company’s limited liability and a partnership’s flexibility. It is possible for an LLP to continue to exist regardless of changes in partners. The LLP is capable of entering into contracts and holding property in its own name. As a separate legal entity, the LLP is liable for the full extent of its assets. However, the partners are only liable for the contribution they have made to it.
2. How to form/incorporate an LLP?
There is no difference between the incorporation procedure of an LLP and the incorporation procedure for a Private Limited Company. To start the formation process, at least two Partners are required. An Indian office location must also be provided. Foreign direct investment in LLPs is allowed only with the RBI’s prior approval. The automatic route to 100% FDI allows NRIs and Foreign Nationals to incorporate Private Limited Companies.
3. When and how can I register my LLP in India?
It is necessary to obtain a Designated Partner Identification Number (DPIN) in order to register an Indian limited liability company. Then, you must obtain your Digital Signature Certificate and register it on the portal. Then, you must have the name of your limited liability company approved by the Ministry. Once the name is approved, you can file an incorporation form to register the company.