What is a Limited Liability Partnership
The LLP was launched in India via the “Limited Liability Partnership Act, 2008”. The main advantage of a “Limited Liability Partnership” is that one partner is not liable for the misconduct or negligence of another partner. The LLP is preferred by Professionals, micro and small businesses which are family-owned or closely held.
A limited Liability partnership offers the benefit of “limited liability” to its owners and at the same time, it requires very minimal maintenance. The owners of a “Private limited company” have limited liability to their creditors. And in the case of a default, banks/creditors can only sell the assets of the company, not the personal assets of the directors.
An LLP also provides “limited liability protection” to the owners from the debts of the LLP. Accordingly, all partners in an LLP enjoy the benefit of limited liability within the partnership.
LLP Registration can be done through “LegalRaasta”, which has offices in Delhi NCR, Mumbai, Bengaluru, Chennai and all other Indian cities.
Eligibility to register a Limited Liability Partnership
- At least 2 partners are required
- At least 2 designated partners are required
- Office location should be within the territory of India
Why Should You Choose An LLP?
It provides “dual advantages” of both a “Company and a Partnership”.
No partner will be responsible for any kind of mischief by the other partner.
Cheaper to incorporate than a “Private limited company”.
Limits the liability of its partners.
It works as a separate legal entity and owns the property of its name.
No minimum share capital is required.
It operates as a separate legal entity and owns the property in the firm name.
It just has fewer compliances and does not have to follow any government rules other than the rules and regulations mentioned in the LLP contract.
Documents required for registration of a limited liability partnership
- Aadhar card of the partners
- PAN Card of the partners
- Passport size photo of the partners
- Current Bank Statement of the partners
- LLP agreement
- Rental agreement of the entity
- No Objection Certificate from the owner
- Utility bills of the entity
LLP agreement is a necessary document for incorporating the limited liability partnership firm. It serves as a legal document which contains all the important points and basic details.
The necessary points which should be mentioned in the agreement are basic details of the partners and the firm, the contribution of partners, rights and privileges of partners, the responsibility of partners, limitations, the liability of partners, legislation meetings, addition and retirement of partners, wind up rules, loan details, sharing a percentage of asset and liability of partners and other necessary details.
Procedure for registering a Limited Liability Partnership:
Digital Signature Certificate:
Digital signature is an encoded electronic signature equivalent to physical documents (driving license) provided by the Government of India.
It has been shortly known as DSC. It prevents the forgery of signatures. The Ministry of Corporate Affairs has administered and issued the digital signature.
Designated Partner Identification Number (DPIN)
The person who intends to become a Designated Partner of the Limited Liability Partnership company should obtain the Designated Partner Identification Number.
It serves as the identity of the designated partners and helps to track them. It has been issued by the Ministry of Corporate Affairs.
The name approval by the Registrar of companies is a must because, according to the Ministry of Corporate Affairs, the limited liability partnership firm should have a unique name.
After that, you can apply for the registration of the limited liability company.
Incorporation of LLP
After you have completed all the steps and received the name approval. Log in to the official portal and fill in Form 2. Submit the required documents and pay the necessary fee.
You can obtain a registration certificate within 14 working days. You must submit the LLP agreement to the Registrars of Companies (ROC) within 30 days from the registration date.
What is included in our LLP registration package?
- DPIN for 2 Partners
- Digital Signature For 2 Partners
- Name search and approval
- LLP Agreement
- ROC Fees and Pan Card
- Free accounting software and GST filing
Now you would have understood more about this topic. Thanks for reading the entire Article. Keep sharing this article to your friends who are in business or about to start their own Business.