Description
Limited Liability Partnership (LLP)
Online LLP Registration in India refers to Limited liability partnership and is governed by Limited Liability Partnership Act 2008. Limited Liability partnership provides the advantage of limited liability to its owners and at the same time requires minimal maintenance. The directors of a private limited company have limited liability to creditors. In case of default, banks/creditors can only sell company?s assets and not personal assets of directors.
LLP is one of the easiest form of business to incorporate and manage in India. With an easy incorporation process and simple compliance formalities, LLP is preferred by Professionals, Micro and Small businesses that are family owned or closely-held. Since, LLPs are not capable of issuing equity shares, LLP should be used for any business that has plans for raising equity funds during its lifecycle.
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Advantages of Limited Liability Partnership
Separate Legal Entity – A LLP is a legal entity and a juristic person established under the Act. Therefore, a LLP has wide legal capacity and can own property and also incur debts. However, the Partners of a LLP have no liability to the creditors of a LLP for the debts of the LLP.
Uninterrupted Existence – A LLP has ?perpetual succession?, that is continued existence until it is brought on the terms of the dissolution by mutual agreement within the partners. Partners may come and go, but an LLP goes on.
Audit NOT Required – A LLP does not require audit if it has less than Rs. 40 lakhs of turnover and less than Rs.25 lakhs of capital contribution. Therefore, LLPs are ideal for startups and small businesses that are just starting their operations and want to have minimal regulatory compliance related formalities.
Easy Transferability – The ownership of a LLP can be easily transferred to another person. All you need is to induct them as a Designated Partner of the LLP. LLP is a separate legal entity separate from its Managing Partners, so by changing the Managing Partners, the ownership of the LLP can be changed.
Owning Property – A LLP being an artificial judicial person, can acquire, own, enjoy and sell, property in its name. No Partner can make any claim upon the property of the LLP – so long as the LLP is a going concern.
Why LLP is better than Private Limited Company?
It is easy to see that both Private Limited Companies as well as LLP Registration procedures are rather simplistic. Thus, it is not a question of ease of incorporation it comes down to deciding the path and future of the company. We have also seen that it could be beneficial to incorporate a private limited company sometimes. However, we provide you with a comprehensive argument for why LLPs should be preferred as compared to Private Limited Companies.
- LLPs combine the operational advantages of a Company as well as the flexibility of Partnership Firms.
- The fee for incorporation of an LLP firm is very nominal as compared to that for Private Limited Company.
- The compliance requirements for an LLP are significantly lower than those for a private limited company. The frequency of mandatory audits for an LLP are 0 if they haven’t crossed the 40 lakh turnover mark or 25 lakh revenue contribution mark.
- A private limited company has restricted ownership and can only extend the number of owners to a maximum of 200 shareholders. However, there is no such limit which applies to LLPs.
- The requirements for meetings are substantially higher for PLCs with the requirement of holding 4 board meetings and 1 Annual general meetings of the company.In an LLP, there is no compulsory requirement of holding meetings.
- The cost of incorporating and maintaining a PLC (Rs. 15000 Incorporation+ Rs.15000Compliances + Rs.15000 Audit) is 3 times higher than that of an LLP(Rs. 11,000 Incorporation + Rs.4,000 Compliances) . This makes LLP an economical choice.
- Adopting the PLC model could be economically hurtful to startup owners . Many a time, PLCs either are unable to pay or do not pay their compliances requirements in time , leading to fines of up to Rs. 1 lakh sometimes. However, with LLPs you can skip the hassle of fines altogether. The fees for compliances of LLP are very nominal and rarely lead up to a fine.
How It's Done
- Purchase of Plan
- Registration of Digital Signature Certificate
- Application of Name Reservation
- Filing of LLP and DPIN application with Registrar
- Receipt of Registration Certificate
- Notarisation of LLP Deed
- Application for PAN and TAN
LLP COMPLIANCE
- Filing of Annual Return (LLP Form 11)
- Filing of Statement of Account & Solvency (LLP Form 8)
- Maintenance of records
- Other compliances
- Income Tax Compliances
- GST Returns
- TDS Returns
Package Includes
- 2 Class 2 Digital Signature*
- 2 Designated Partner Identification Number
- 1 Name Approval of LLP*
- Upto 1 Lakh Contribution
- LLP Deed Drafting
- Incorporation Fee
- Incorporation Certificate
- Apply for PAN Card
- TAN Registration
- New GST Registration
- Online GST Certificate
- MSME Registration
- E-Way Bill Registration
- 1 Month GSTR3B Return Filing
- 1 Month GSTR1 Return Filing
- Online Payment Gateway
- Assistance
*
- Class 2 Digital Signature – with 2 year validity on secure USB token.
- 1 Name Approval of LLP – Upto 4 name options can be given in 1 name approval request. If rejected, fee will applicable again of Rs.2000.
- Udyog Aadhaar Registration – will be provided only if eligible for Udyog Aadhaar Registration.
Frequently Asked Questions
At least two partners are required for Online LLP Registration in India. The maximum partners can be 200. If you are the sole owner, you can register as a One Person Company.
The Designated Partners needs to be over 18 years of age and must be a natural person. There are no limitations in terms of citizenship or residency. Therefore, the LLP Act 2008 allows Foreign Nationals including Foreign Companies & LLPs to incorporate a LLP in India provided at least one designated partner is resident of India.
An address in India where the registered office of the LLP will be situated is required. The premises can be a commercial / industrial / residential where communication from the MCA will be received.
tarting the business. You needn’t even deposit this amount to the bank. You can also show that the capital has been utilised as the pre-incorporation expenses of LLP e.g, LLP registration expenses. You can also show this capital has been infused in form of assets such as computers etc.
Yes, a NRI or Foreign National can be a Designated Partner in a Limited Liability Partnership after obtaining Designated Partner Identification Number. However, atleast one Designated Partner in the LLP must be a Resident India.
Once a Limited Liability Partnership is incorporated, it will be active and in-existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the LLP will become a Dormant and maybe struck off from the register after a period of time.
No, you can’t convert your LLP into a Private Limited Company as it is not MCA. Both the LLP Act, 2008 and the Companies Act, 2013 don’t have any provisions on conversion of LLP in a private limited company. However, if you want to expand your business you can register a new Private Limited Company with the same name as that of the LLP. The LLP company just needs to issue a no objection certificate.
Other Entity Registrations
Difference Type
- Recommended For
- Ease of Investment
- Limited Liability Protection
- Tax Advantages
- Perpetual Existence
- Statutory Compliances
Limited Liability Partnership
- Professional Service Firms
- Possible, but unlikely
- Yes
- Most efficient
- Yes
- Low
Private Limited Company
- Start-Ups & Growing Businesses
- Very Easy to Accommodate
- Yes
- Few Benefits
- Yes
- High
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