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(Takes 15-30 days)
Limited Liability Partnership (LLP) Registration
LLP was launched in India via the “Limited Liability Partnership Act, 2008”. The most important benefit of a “Limited Liability Partnership” is that, one partner is not liable for another partner’s misconduct or negligence. LLP is favoured by Professionals, Micro and Small businesses which are family-owned or closely-held.
Limited Liability partnership offers the benefit of “limited liability” to it’s 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 company’s assets and 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 it’s offices in Delhi NCR, Mumbai, Bengaluru, Chennai and all other Indian cities.
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 misconduct by the other partner.
- Cheaper to incorporate than a “Private limited company”.
- Limits the liabilities of it’s partners.
What Is Included In Our LLP Registration Package?
- DPIN for 2 Partners
- Digital Signature For 2 Partners
- Name search & approval
- LLP Agreement
- ROC Fees & Pan Card
- Free accounting software & GST filing
Procedure For LLP Registration
Factors to Consider While Selecting an LLP Name
The Registrar of Companies (RoC) has issued naming guidelines for LLPs. You must follow the rules closely or your application may end up getting rejected, leading to a much longer process.
The name of your LLP Company should be linked to your business. It must suit the company’s branding. For example, Lilliput means small, as “Lilliput” is a clothing brand for kids.
Short & Simple
The name of your LLP must be short and to the point. It must be easily pronounceable by people. And it should get registered in the minds of people, when they hear it the first time itself.
Name of your company should not be identical or alike in comparison to an existing company, business, or trademark. You can go to “legalraasta.com” to verify whether your company’s name is unique or not. You must ideally avoid using the “plural version” factor while choosing a name, For example: – “Amazon’s” or changing just the letter Case or adding a space or a punctuation mark in an existing company’s name.
Abstracts, adjectives and generic words are denied, so a name like “XYZ” will be rejected on the spot. The following words “bank, exchange and stock exchange” will also be denied.
No same Trademarks
There should not be a certified trademark by the identical name on the “IP India” website. If there is one, then also your chosen company name can still be approved if you are able to obtain a NOC from it’s owner, which will authorize you to use the name.
The name of your LLP Company must finish with the suffix “LLP”, as it is the requirement of a “Limited liability partnership”.
The chosen name should be descriptive, meaning that the name itself should be able to tell about a number of traits of the LLP.
Should not be illegal or offensive
While picking up an LLP name make sure that the name you have chosen, does not violate the law. It should not be abusive or against the customs and beliefs of any religion and doesn’t provide any harm to any individual’s respect.
Steps to form an LLP
Step 1: Digital Signature Certificate (DSC)
Before starting the process of registration, you must enrol for the DSC of the designated partners, of the proposed LLP. Applying for “DSc” is important because the registration process of LLP is done online and requires a digitally signed signature.
So, the LLP partners must get the DSC from government-approved certifying agencies.
Step 2: Application of DIN (Director Identification Number) and DPIN ( Designated Partner Identification Number)
After applying for DSC, the next step is to enroll for DPIN and DIN application, for the proposed partners of the LLP, within a timeframe of 5 to 7 working days. The application for allotment of DIN has to be made in Form DIR-3. You have to attach a scanned copy of your “Aadhaar and PAN card” to the form. The form needs to be signed by a Company Secretary, which is in full- time employment of the company or by the Managing Director, Director, or CEO of the existing company, in which the candidate shall be designated as a director.
Step 3: Name Approval and Reservation with ROC
“LLP-RUN” i.e. “Limited Liability Partnership-Reserve Unique Name” is required to register for the reservation of the proposed LLP’s name. This is further treated by the Central Registration Centre under Non-STP. But before circulating the name in the form, it is suggested that you use the free name search facility on the LegalRaasta portal. The system will provide you a list of similar names of the existing LLPs. “One to six” is the limit of proposed names, which are to be given to the MCA. The registrar will approve the name only if the name is not useless in the opinion of the Central Government and does not match any existing partnership firm or an LLP.
The Name approval process will take 5 to 7 working days. A re-submission of the form is made after 15 days, in the case of a rejection.
Step 4: MOA & AOA submission
Once the name is approved, one is required to draft a “Memorandum of association” and “Articles of Association”. Both MOA and AOA are to be registered with the MCA, within the agreement statement.
Step 5: Get Incorporation Certificate of LLP
The form used for incorporation is “FiLLiP” (Form for incorporation of Limited Liability Partnership), which must be registered with the Registrar, who has jurisdiction over the state, in which the registered office of the LLP is located. The form will be an integrated form. Incorporation documents can be presented to the MCA along with an application for incorporation. MCA will approve the application for incorporation within 5 to 7 days. “Incorporation certificate” is proof of the fact that the company has been formed. It also involves your CIN number.
Step 6: Appeal for PAN, TAN and Bank account
Then you are required to apply for both “PAN and TAN” and you will receive them in 7 working days. You can submit the Incorporation certificate, MOA, AOA and PAN with the bank, for opening your bank account.
Step 7: Register for LLP Agreement
An LLP agreement oversees the mutual rights and duties between the LLP and it’s partners. An LLP agreement must be registered in Form 3, which is to be filed in a span of 30 days after receiving the “Incorporation Certificate”.
Eligibility For LLP Registration
Minimum 2 Partners (18 years and above age)
No Capital Requirement
At least one Designated Partner as Indian Resident
DPIN for all Partners
Why choose LLP Registration?
- It is a separate legal entity, unlike partnership firms.
- The liability and responsibility of every partner is limited to the contribution made by each partner.
- An LLP has the advantage of “perpetual succession”, which means extended survival until it is brought to an end by a mutual agreement between all the partners.
- The cost of forming an LLP is low.
- Audit is not required as LLPs are medium and small businesses, who want to have the advantage of “minimal regulatory compliance”, which comes attached with certain formalities.
- Less agreement and regulations in the formation of LLP.
- No terms for minimum capital contribution.
- The ownership of an LLP can be easily shifted to another person. All you require is to recruit them as a Designated Partner of the LLP.
The minimum number of partners to incorporate in an LLP is 2 and the maximum number has no limit. The powers and responsibilities of the designated partners, are administered by the LLP agreement. They are directly responsible for the compliance of all the provisions which have been mentioned in the “LLP Act, 2008” and terms defined in the “LLP agreement”.
If you want to commence your company with a “Limited Liability Partnership”, then you must get it incorporated under the Limited liability Partnership Act, 2008.
Documents Required For LLP Registration
- Copy of PAN Card of partners
- Passport size photograph of partners
- Copy of Aadhaar Card/ Voter identity card/ Driver’s license as address proof
- Electricity/ Water bill/ Telphone bill/ Latest bank statement as proof of Registered Office (Business Place)
- Copy of Sale Deed/Property Deed (If owned property)
- Landlord NOC (Format will be provided)
- Passport (in case of Foreign Nationals/ NRIs)
- Digital Signature Certificate
- Copy of Notarised Rental Agreement
- Copy of NOC from the property owner
Important forms in LLP Registration
- RUN – LLP Reserve Unique Name-Limited Liability Partnership- A form for reserving a name for the LLP
- FiLLiP – A Form for incorporation of LLP
- Form 5- Notice for change of name
- Form 17- Application and statement for the conversion of a firm into LLP
- Form 18- Application and Statement for conversion of a private company or unlisted public company into LLP
Checklist: If your company qualifies for LLP in India
- A minimum of 2 partners. There is no boundary to the maximum number of partners
- The nomination of a natural person, if a corporate body is the other partner.
- No shared capital requirement, though each partner has to contribute towards it.
- Minimum capital contribution: There is no minimum capital demand for an LLP (or a company, for that matter). The LLP should have an approved capital of Rs. 1 lakh.
- Minimum 1 Designated Partner who is a “resident of India”.
- DPIN for all Partners
- DSC for all the Designated Partners
- Address proof of the Registered office of the “LLP”. Even a rented home can be the registered office, as long as a NOC is obtained from the landlord.
Any kind of company is required to adhere to/fulfill certain specific conditions, to obtain the benefit of “registering as an LLP”.
Any company who has:
What are the Compliance Requirements after an LLP Company completes the registration procedure in India?
Once the registration process of the LLP is complete, then the newly incorporated LLP is expected to finish the following compliance procedures. These compliances are one time in nature and are not repeated.
1. Partnership Agreement Filing
2. Apply for PAN & TAN
3. Open Bank Account
Annual Compliances Requirements after the LLP Registration
After completion of the registration process, an LLP is expected to conform to the annual compliance requirements. These compliances are compulsory to meet irrespective of the fact that whether they have started a company or not. If the number of transactions after the LLP registration is 0, then LLP will record NIL return.
Following returns are expected to be registered:
1. Statement of Account & Solvency
2. LLP Annual Return
3. Income Tax Return
Concerns Related To Private Limited Company
- A Pvt. Ltd company requires a few more ROC compliances, which results into an additional cost of Rs.5,000 to Rs.10,000 per annum.
- Minimum capital amount required is Rs.1,00,000
- A Private limited company can have a maximum of 200 members.
Still, all the aspiring entrepreneurs prefer the tag of a “Private limited Company” for obtaining certain benefits such as “ease in transfer of shares and a significant potential for future growth”.
Penalty Provisions in the case of an “LLP Annual Compliance Default”
According to the “Limited liability Partnership Act, 2008”, it is compulsory to register for all the prescribed compliances on an annual basis. There is a provision for a penalty, in case of any failure in registering Form 8 and Form 11, for reporting of the LLP’s financial statements and annual returns. A fixed amount of Rs.100 per day, for each agreement that is not registered. No maximum limit is specified.
Every registered LLP is expected to do Income tax return filing along with “Annual filing”. This filing should be done by 30th September every year. After an LLP has gotten itself registered, then any kind of failure in meeting this deadline will result in a penalty of Rs.5,000 and the filing must be done by 31st December of every year. And if the LLP still fails to meet this deadline, then the penalty amount will be double i.e Rs.10,000.
Timeline for LLP Registration in Delhi
It takes 15 to 30 working days (approx.) to finish the “Limited Liability Partnership” registration procedure. The timeline may vary depending on responses from ROC department.
Frequently Asked Questions
Updates as on February 09, 2021
- 05 Feb, 2021, Aided by artificial intelligence and machine learning, the third version of MCA21 — a portal for submitting various filings under the companies law and LLP Act — will have “micro-services architecture with high scalability and capabilities for advanced analytics”.
- 03 Feb, 2021, The government will decriminalise 12 compoundable offences under the Act and will omit section 73, which relates to penal provisions in case of non-compliance with orders of a tribunal.
- 30th March, 2020, AMCA has launched 2 schemes- Companies Fresh Start Scheme and Revised LLP settlement scheme. There is a waiver of the penalty of up to Rs 107800 for 1 year and Rs 136900 for 2 years till 30th September.
Why Choose Legalraasta