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Limited Liability Partnership Registration

Limited Liability Partnership - An Overview

A Limited Liability Partnership (LLP) is a unique business structure that combines aspects of both a partnership and a company. In an LLP, partners have limited liability, similar to shareholders in a company, while enjoying the flexibility and simplicity of a partnership. This setup gives the LLP its own legal identity, allowing it to engage in legal activities and be liable for its actions independently of its partners.

LLP Registration Requirements and Eligibility Criteria

To register an LLP in India, the following criteria must be met:

  1. Minimum of Two Partners:
    You need at least two partners to establish an LLP in India. There is no upper limit on the number of partners.
  2. Designated Partners:
    Among the partners, at least two must be designated partners, who must be natural persons. At least one of these designated partners must be an Indian resident.
  3. Nomination for Body Corporate Partner:
    If a body corporate acts as a partner, it must appoint a natural person as its representative.
  4. Agreed Contribution:
    Each partner must contribute to the shared capital of the LLP as agreed upon.
  5. Minimum Authorized Capital:
    The LLP must have an authorized capital of at least Rs.1 lakh.
  6. Indian Resident Designated Partner:
    At least one designated partner must be a resident of India.

By meeting these criteria, you can proceed with registering an LLP in India and benefit from this business structure.

Key Features of an LLP

  1. Legal Identity:
    An LLP has its own legal identity, separate from its partners, similar to larger companies. This means it can own property, incur liabilities, and engage in contracts in its own name.
  2. Minimum Two Partners:
    An LLP requires at least two people to start. This collaboration helps in establishing and running the business.
  3. No Maximum Partner Limit:
    There is no maximum number of partners in an LLP, allowing for growth and the inclusion of more partners.
  4. Two Designated Partners:
    An LLP must have at least two designated partners, who must be natural persons. One of them must be a resident of India.
  5. Limited Liability:
    Partners have limited liability, meaning they are only responsible for the amount they have invested. Their personal assets are protected from business debts.
  6. Cost-Effective Setup:
    Setting up an LLP is less expensive than forming a large company, making it a suitable option for smaller businesses.
  7. Fewer Regulations:
    LLPs have fewer regulatory requirements compared to large companies, reducing paperwork and compliance burdens.

8. No Minimum Capital Requirement:
There is no fixed minimum capital needed to start an LLP. Partners can invest according to their capacity.

Advantages of an LLP

  1. Own Legal Identity:
    An LLP is recognized as a separate legal entity, which enhances trust and credibility. It can independently engage in legal activities.
  2. Limited Risk for Partners:
    Partners are only liable to the extent of their investment. They are not personally responsible for the LLP’s debts, protecting their personal assets.
  3. Cost and Time Efficiency:
    Starting and maintaining an LLP is cost-effective and involves less compliance work compared to larger companies.
  4. Flexible Capital Investment:
    There is no minimum capital requirement, allowing partners to invest as per their financial capability.

Disadvantages of an LLP

  1. Penalties for Non-Compliance:
    Despite having fewer regulations, LLPs can face heavy penalties for non-compliance. Even if inactive, an LLP must still submit annual filings to avoid fines.
  2. Dependence on Partners:
    An LLP must have at least two partners. If the number falls below two for six months, the LLP may be required to dissolve.
  3. Challenges in Raising Large Funds:
    LLPs cannot raise large sums of money as easily as corporations, as they cannot issue shares to the public.

Naming an LLP

Choose a unique name not used by other businesses to ensure approval and establish your identity. Include words that clearly describe your business activities. End the name with “LLP” or “Limited Liability Partnership” to indicate the business structure.

Documents Required for an LLP Registration

To register an LLP, the following documents are needed:

  1. PAN Card/ID Proof of Partners: Voter’s ID, Passport, Driver’s License, or Aadhaar Card.
  1. Residence Proof of Partners: Recent documents such as a bank statement, telephone bill, mobile bill, electricity bill, or gas bill from the last 2-3 months.
  1. Passport-size Photograph: A passport-size photograph with a white background.
  1. For Foreign Nationals and NRIs: Passport and proof of address, such as a driving license, bank statement, residence card, or any government-issued identity proof with an address.
  1. Proof of Registered Office Address: Landlord’s rent agreement and a no-objection certificate if the office space is rented. A recent utility bill (gas, electricity, or telephone) with the complete address and owner’s name (dated within two months).
  1. Digital Signature Certificate (DSC): At least one designated partner must have a DSC for digitally signing documents.

Procedure for LLP Registration

Here are the steps to register an LLP online:

  1. Obtain a Digital Signature Certificate (DSC): All proposed partners must get a DSC since government filings require digital signatures.
  1. Obtain Director Identification Number (DIN): Partners without a DIN must apply for one. The DIN is necessary for becoming directors or designated partners in LLPs.
  1. Choose a Name for the LLP: Select a unique and appropriate name for your LLP, adhering to Ministry of Corporate Affairs guidelines.
  1. Form for Incorporation of LLP (FiLLiP): This form collects essential information about the proposed LLP, partners, LLP agreement, and registered office address. It includes a declaration from partners consenting to act as designated partners and comply with LLP regulations.
  1. Draft LLP Agreement: Create an LLP Agreement outlining the rights, duties, and obligations of partners. This agreement must be notarized and filed with the Ministry of Corporate Affairs within 30 days of incorporation.
  1. Obtain a Certificate of Incorporation: Once forms and documents are filed and verified, the Registrar of Companies (RoC) will issue the Certificate of Incorporation, officially recognizing the LLP’s existence.
  1. Apply for PAN and TAN: After getting the Certificate of Incorporation, apply for the Permanent Account Number (PAN) and TAN for the LLP.

By following these steps, you can complete your LLP registration online and start your entrepreneurial journey.

How CRSB can help you in this Registration Process ?

CRSB is your reliable partner for the entire LLP registration process. Here’s how we can assist you:

  1. Experienced Professionals: Our knowledgeable team understands the details of LLP registration. We provide accurate information to help you understand each step.
  1. Name Availability: We help you check if your desired LLP name is available and reserve it according to the rules.
  1. DSCs and DINs: We assist you in obtaining the Digital Signature Certificates (DSCs) and Director Identification Numbers (DINs) necessary for the registration process.
  1. LLP Agreement: Our experts help draft the LLP Agreement, ensuring it is legally sound. We also handle the filing of required documents with the authorities, ensuring accuracy and compliance.
  1. PAN and TAN Application: We simplify the process of applying for your LLP’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
  1. Customer Support: Our customer support team is available to answer your questions, ensuring a smooth registration process.
  1. Affordable LLP Registration Fees: Our registration fees are designed to be affordable while providing high-quality service, including MCA name approval, instant filing, and multiple name choices for a seamless startup experience.
  1. Timely Updates: We provide timely updates on your LLP registration progress, keeping you informed every step of the way.

With CRSB as your partner, you can confidently navigate the LLP formation process, guided by experienced professionals who ensure a hassle-free experience from start to finish.

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