Limited Liability Partnership Registration in India has advantage of both Company and Partnership firm into a single organization. Limited Liability Partnership Act of 2008 has introduced the Idea of LLP in India. LLP Registration is done through MCA as Company registration. This is suitable for setting small, medium-sized businesses.
Minimum of two partners are required to register LLP, there is no upper limit. The rights and the duties of the Partners are mentioned in LLP. One partner is not bound for the misconduct and negligence of the other partner. Both partners are bound for the compliances and all the provisions which are mentioned in the LLP agreement.
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Benefits of a Limited Liability Partnership
Limited Liability
The partners of LLP are liable for only small amount of debt incurred by the firm. In case of bankruptcy, the personal assets of the partners will not be seized in case LLP goes into bankruptcy, While On the other hand, in case of proprietorships and partnerships, the personal assets of proprietor or partners will be seized if the business goes bankrupt.
Separate Legal Entity
An LLP and partners in it, both are a separate legal entity. It has an uninterrupted existence that business remains in existence even if the partners leave. In case of the firm to dissolve, terms of dissolution have to be mutually agreed. The LLP is a legal body. It can rent, buy, own property, lease, enter into contracts, employ staff and be held accountable if necessary.
Flexible Agreement
The ownership of an LLP can be easily transferred to any incoming person and inducted them as designated partner in LLP. The operation of the partnership and share of profits is as per written agreement between the members.
Suitable For Small Scale Enterprises
LLPs having turnover below ₹40 lakhs per year or a capital amount less than ₹25 lakhs do not require any statutory audits. And this criteria makes LLP beneficial for small businesses and startups.
No Requirement Of Minimum Contribution
There is no minimum capital requirement in formation of LLP. Moreover, the partner can contribute tangible, movable or immovable or intangible property or other benefits while or after incorporation of LLP.
Taxation In Case Of LLP
LLP has liability to pay income tax but shares of partners in LLP is not liable to tax. Hence dividend distribution tax is not payable. Commission or remuneration, Bonus, salary, Interest to partners is exempted from tax i.e allowed as deduction.
Dividend Distribution Tax (DDT) Not Applicable
In the case of a company, if the owners to withdraw profits from the company, then additional tax @ 15% (plus surcharge & education cess) as DDT is payable by the company. But in case of LLP, profit can be easily withdraw by its partners and no such tax is payable.
Eligibility Criteria
- At least two partners required (no upper limit).
- a natural person must be nominated to represent LLP in case body corporate is a partner.
- Each partner should be agreed to contribution for the shared capital.
- LLP must have an authorized capital of at least ₹1 lakh.
- At least one partner should be a Indian resident.
Documents Required for LLP Registration
The following documents are required from each partner for LLP formation:
- Aadhar card, PAN card or passport (foreign nationals or NRIs) and Passport size photo.
- voter’s ID/ passport/ driving license.
- Latest bank statement/ telephone bill / electricity bill.
Note: For NRI or Foreign nations, all the documents should be notarized (if currently residing in India or a non-commonwealth country) or apostilled (if NRI belongs to a commonwealth country).
For the registered office:
- Electricity Bill.
- Notarized rental agreement in english.
- No-objection certificate from the property owner.
- In case company owns property, then Sale deed required.
How to Register an LLP Online with BestTaxInfo
Registering an LLP online through BestTaxInfo. Registration process is explained below for your knowledge:
Step 1: Obtaining DSC and DIN
Forms that need to be submitted on MCA require the directors’ DSC. So, the first task is to get DSCs and DINs for 2 partners. ASAP we get the necessary information from you and we ll file it on your behalf.
Step 2: Application for Name Approval
At the same time, we ll check if the name you want to register for LLP is available or not and reserve it for your LLP. The name should not have resemblance to any of the existing LLPs, trademarks, or body corporates.
Step 3: LLP Agreement
Then next task is to draft the LLP agreement and other required documents for registration. An LLP agreement is very important in a limited liability partnership as it defines the mutual rights and duties amongst the partners, between the LLP and the partners. Thus, our team of experts take full care in drafting this agreement.
The partners enter into the LLP agreement after registering the LLP have to file Form 3 online on the MCA portal. This task has to be done within 30 days from the date of incorporation.
Step 4: LLP Incorporation Certificate
Our experts will file the necessary forms with the registrar. Once the registrar approves all the forms and related documents, you ll get your LLP incorporation certificate and are ready for running your business.
Step 5: Apply for Your PAN, TAN, & Bank Account
Once you get the incorporation certificate, we will apply for the PAN, TAN, and bank account for your LLP.
The following are included in BestTaxInfo’s LLP Registration package:
- DSCs for 2 directors
- DINs for 2 directors
- Drafting of MoA & AoA
- Drafting LLP agreement
- Registration fees and stamp duty
- LLP incorporation certificate
- PAN and TAN registration
We, at BestTaxInfo will assist with following to register a LLP:
- Free consultation, followed by all support to clear every doubt you may have
- Throughout support on opening a current bank account
- On-time updates on ROC compliances
- A Input Sheet that contains all the documentation needed to file the incorporation
Time Taken for LLP Registration
It takes 15-20 days to register a limited liability partnership in India which also depends upon receiving the required documents and paperwork. The Registrar will register the LLP, in max to max 14 days after Form-2 is filed, and issue a certificate of incorporation in Form-16.
Why BestTaxInfo?
- Our package includes all you need for LLP incorporation online and get it business-ready
- Our team of experts are up to date with the LLP laws and have guided businesses like you to form their limited liability partnership in India
- You’ll get your LLP incorporation certificate in 15-20 days
- Our team of experts are available to answer any query you may have regarding the formation of LLP.
