LLP is a partnership organization where some/ all partners (as per jurisdiction) exhibit the limited liability. It is a corporate business vehicle which enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership organization. All the partners are not responsible/ liable for any kind of misconduct or negligence by any other partner. Limited Liability Partnership (LLP) Act, 2008 and Limited Liability Partnership Rules, 2009 contains the provisions regarding the legal formalities for setting up/ working of an LLP.
- Limited Liability First and foremost benefit of trading/doing business via LLP is the limited liability conferred upon the partners. If an LLP becomes insolvent and is wound up, only the assets of the LLP are used to clear its debts and the partners of LLP have no personal liabilities and are not made bankrupt and are free to operate as credible businessmen.
- No Mandatory Audit Requirement There is no requirement of audit, unless capital of an LLP and turnover exceeds Rs. 25 lakh or Rs. 60 lakh, respectively.
- Tax burden reduces LLPs are taxed like general partnership firms. They are exempted from 10% surcharge and there is no requirement for payment of Dividend distribution/Corporation Tax on distribution of income/profits among partners.
- Renowned form of business Though the concept of LLP has been recently introduced in India, but it is very known concept in other countries of the world especially in service sector.
- Transfer of LLP is easy It is easy to join or leave an LLP and also, the transfer of ownership in accordance with the terms of an LLP Agreement is simple. These changes of ownership, saves the time and money and also stamp duty.
- Min. two partners (individual/ body corporate).
- Minimum of two individuals as designated partners, out of total no. of partners.
- DPIN (designated partner identification number) for all partners.
- DSC (digital signature certificate) for any one partner.
- Registered address (owned/ rented). NOTE: At least one designated partner should be Indian.
- PAN Card & address proof of partners.
- Passport size photograph of partners.
- Signed affidavit from the partners for DPIN.
- Proof of registered address of LLP.
- Qualifications of partners.
- Authorized capital for LLP.
- Proposed LLP names (1+5).
- Significance of proposed LLP name.
- Main objective of LLP (nature of business).
- Registered address of the LLP.
- Ratio of contribution of partners.
DPIN can be obtained by making an application online. All the existing and intending partners have to obtain DPIN within the prescribed time-frame as notified in Section 7 (6) of LLP Act 2008.
Digital Signature can be obtained from any of the Certifying Authorities in India. It is required as all the filings done by the LLP's under MCA21 e-Governance programme are need to be filed online with the use of Digital Signatures by the person authorised to sign the documents.
After finalization of name, an application of name availability has to be filed in form 1A. Please note that selection of name is subject to Guidelines issued by MCA.
It is an agreement governing the mutual rights and duties amongst the LLP and its partners. The basic contents of agreement are name of LLP, form of contribution, profit sharing ratio, rights & duties of partners, proposed business and rules for governing the LLP.
In case no agreement is entered into, the rights & duties as prescribed under Schedule I to the LLP Act shall be applicable. It is not necessary to have the LLP Agreement signed at the time of incorporation, as the details of the same needs to field in e form 3 within 30 days of incorporation but in order to avoid any dispute between the partners as to the terms & conditions of the agreement after the formation of LLP, it is always beneficial to have the LLP Agreement drafted and executed before the incorporation of the LLP.
Form 2 – This is an application contains informative details of LLP, its partners (including designated partners along with their amount of contribution) and consent for forming an LLP to carry on a lawful business with profit motive along with declaration stating that all the requirements of LLP Act, 2008 regarding incorporation of LLP in India have been complied with.
Form 3 – It is an application that provides information of LLP agreement in between LLP and its partners.
Form 4 – Here, consent of each partner to become a partner of LLP along with their address and identity proof is being filed with the respective ROC.Note - Form 3 & 4 are required to filed within 30 days of the incorporation.
The ROC will issue Certificate of Incorporation after careful review of documents submitted in the above stated steps, maximum within 14 days of the receipt of documents. The Certificate of Incorporation issued shall be the conclusive evidence of formation of the LLP.
Charges for registration (inclusive of govt. fee, our professional fee & out of pocket expenses)
Within Delhi-NC : Rs. 10,000/-
Outside Delhi-NCR : Rs.11,000/-