Limited Liability Partnership (LLP) has become a preferred form of organization among entrepreneurs as it incorporates the benefits of both partnership firm and company into a single form of organisation. The Limited Liability Partnership Act, 2008 regulates the LLP in India. Minimum two partners are required to incorporate an LLP. However, there is no upper limit on the maximum number of partners of an LLP.
Among the partners, there should be a minimum of two designated partners who shall be individuals, and at least one of them should be resident in India. The rights and duties of designated partners are governed by the LLP agreement. They are directly responsible for the compliance of all the provisions of the LLP Act, 2008 and provisions specified in the LLP agreement.
Step 1: Obtain Digital Signature Certificate (DSC)
Step 2: Apply for Director Identification Number (DIN)
Step 3: Name Approval
Step 4: Incorporation of LLP
Step 5: File Limited Liability Partnership (LLP) Agreement
CHECKLIST FOR LLP REGISTRATION
Difference between Private Limited Companies and Limited Liability Partnership?
Point of Difference | Private Limited Company | Limited Liability Partnership |
---|---|---|
Minimum and Maximum Members |
Minimum - 2 Maximum - 200 |
Minimum - 2 Maximum - unlimited |
Minimum Directors |
Minimum - 2 directors Maximum - 15 directors |
Minimum - 2 directors Maximum - not applicable |
Term used at the end of the name | Privated limited | LLP |
Statutory meeting | Mandatory | Not Mandatory |
Board meeting | Necessary | Not Necessary |
Registration Acts | Registered under Companies Act 2003 | Registered under LLP Act 2008 |
Statutory Audit | Mandatory | Not compulsary under partner's contribution exceeds 25 lakhs or annual turnover exceeds 40 lakhs |
Difference between One Person Companies and Limited Liability Partnership?
Point of Difference | One Person Company | Limited Liability Partnership |
---|---|---|
Transferability of Shares |
Can be made by altering MOA |
Can be transferred by executing agreement before a notary public |
Minimum and Maximum Members |
Minimum - 1 Maximum - 1 |
Minimum - 2 Maximum - unlimited |
Minimum Directors |
Minimum - 1 Maximum - 15 |
Minimum - 2 Maximum - unlimited |
Registration Act |
Registered under Companies Act 2013 |
Registered under LLP Act 2008 |
Minimum Subscription |
Can allot shares without completing minimum subscription. |
Cannot allot shares without completing minimum subscription. |
Term used at the end of the name |
Should end with (OPC) Pvt. Ltd./ (OPC) Ltd. |
Should end with LLP |
Statutory meeting |
Not Mandatory |
Mandatory |
Board Meeting |
Necessary |
Not Necessary |
Statutory Audit |
Mandatory. |
Not compulsory unless partner’s contribution exceeds 25 lakhs or annual turnover exceeds 40 lakhs |
Difference between Partnership and Limited Liability Partnership?
Point of Difference | Partnership | Limited Liability Partnership |
---|---|---|
Liability |
Unlimited Liability |
It has a separate legal entity. Limited Liability |
Minimum and Maximum Members |
Minimum - 2 Maximum - 20 |
Minimum - 2 Maximum - unlimited |
Registration Act |
Registered under Partnership Act 1932 |
Registered under LLP Act 2008 |
Registration |
Registration is to be done with Ministry of Corporate Affairs. |
Registration is to be done with Registrar of Firms |
Minor Partner |
Minor can be partner |
Minor cannot be partner |
Annual Return |
Not mandatory to file |
Mandatory to file |
Agreement between partners |
Partnership Deed governs the partnership. |
LLP Agreement governs the LLP |
DSC |
Not required |
Required |
Limited Liability Partnership
One who is willing for LLP Registration must have to fill Form 8 and Form 11. Whereas Form 11 should be filed within 60 days before the end of the financial year that is an annual return for LLP. And, Form 8 should be filed within 30 days from the end of 6 months of the financial year.
Any individual who is financially strong and willing to start a business can join LLP. Moreover, a body Corporate is also eligible for LLP and they are mostly the registered ones under LLP Act. But some exceptions are also present and they are society and corporation sales, which means these bodies can’t become a partner in LLP.
LLP is a business and for any business, GST return filing is mandatory. So, GST Registration is a must and for the same, few documents are required and they are listed below. Partners photographs PAN Cards and Aadhaar Card of partners Business Address and LLP Registration Certificate. Bank Details of Partners
The investors can invest in LLP via capital contribution or profit shares and the price should not be less than market value.
The Limited Liability Partnership will be a separate legal entity and while the Limited Liability Partnership itself will be liable for the full extent of its assets the liability of the members (partners) will be limited.
Every limited liability partnership must have at least two, formally appointed, designated members at all times. If there are fewer than two designated members then every member is deemed to be a designated member.
No, The Limited Liability Partnerships Act 2000 does not impose a structure for the management of a Limited Liability Partnership. There is no statutory provision for general meetings, directors, company secretary, share allotments, etc. As with the existing common law partnership, these are matters for the partnership agreement which we recommend you have drawn up.
LLP has a corporate structure and the operations are performed via an agreement between the partners. Here, the partners have flexibility in their action whereas, in a traditional partnership firm, the partners are jointly responsible for any consequences.
As a body corporate an LLP may own assets in the same way a company owns assets. The official receiver should use the accounting records, any accounts, any LLP partnership agreement and any other records to establish whether the assets (if any) belong to the LLP or the individual members.
To register an Indian LLP, you need to first apply for a Designated Partner Identification Number (DPIN), which can be done by filing e-Form for acquiring the DIN or DPIN. You would then need to acquire your Digital Signature Certificate and register the same on the portal. Thereafter, you need to get the LLP name approved by the Ministry. Once the LLP name is approved, you can register the LLP by filing the incorporation form.
Yes, LLP can be registered at home address. Registered office of a company is the main office of the company, association or any other legal entity where all the official correspondence and formal notice sent by the governmental departments such as the registrar of LLP, Central or State Government, Income tax Department or other authorities, investors, banks, shareholders and the general public is received.
The income tax rate applicable for LLP registered in India is a flat 30% on the total income. In addition to the income tax, a surcharge is levied on the income tax payable at the rate of 12% when the total income exceeds Rs. 1 crore.
LLP not allowed to do investment activity. Even RBI Act and LLP Act both don't allow LLP to do investment activities.