What is a Limited liability Partnership?
LLP Offers more enhanced features than a general tradition partnership. It can be registered with minimum two Partners. Limited Liability Partnership provided the benefits of both private limited LLP and General Partnership into a single form of the LLP, and one partner is not liable for another partner's misconduct or wrong decisions. Each partner will have own liability towards the Business. LLP is most preferred by small business owners and for them who are not willing for venture funding in business. The Limited Liability Partnership has more credibility than a General Partnership or Proprietorship business. Annual maintenance of LLP firm is much cheaper than a Private limited or LLP
Limited Liability Registration in India
Limited Liability Partnership Act, 2008 was enacted by the Legislature with an objective to introduce a type of business entity which can be easily managed and still had the benefits of limited liability and better credibility. Right after its introduction LLP registration in India has gained tremendous popularity as it holds the best of both worlds.
After successful LLP registration, the partners have limited liability like registered companies. it can be easily incorporated and there are very minimal compliance requirements after Limited Liability Partnership registration in India. However, regular compliance with MCA helps maintain transparency and credibility in the market.
If you and your partner have an intention to opt for Limited Liability Partnership registration but still have any doubts about the LLP registration procedure, requirements or LLP registration fee then you can contact our experts for a consultation. To contact us please post an inquiry by providing basic information and clicking on ‘GET STARTED’ button or email us on firstname.lastname@example.org. Our LLP registration consultants will contact you within 3-4 days.
What are the basic Features to know before Limited Liability Partnership registration?
- Limited Liability Partnership registration in India is recognized under and is governed by the provisions of the Limited Liability Partnership Act, 2008
- After Limited Liability Partnership registration in India, it is regulated by the Ministry of Corporate Affairs.
- It is mandatory that within 30 days of Limited Liability Partnership registration a copy of the duly stamped partnership deed is submitted with the MCA via Form-3.
- Every Limited Liability Partnership needs to add the words ‘LLP’ to at the end of the LLP’s name.
- LLP is a perfect mixture of all the good features of a registered Company and Partnership Firm.
Who should opt for LLP registration in India?
Limited Liability Partnership registration is most preferred for small and medium scale business. Usually,family-based or other closely held businesses opt for limited liability partnership registration.
On a second note, if you have plans to raise capital in future Limited Liability Partnership registration is not the recommended for you. As LLPs are not authorized to issue equity capital and it is very difficult to raise venture capital after LLP registration in India.
Check List for LLP registration in India
- KYC of all the designated Partners
- Digital Signature
- Name Approval
- Final Incorporation
- Partnership Agreement
For LLP registration in India minimum 2 Designated Partners are required. All the proposed Designated Partners are required to provide self-attested KYC documents including PAN Card, AAdhar card and Election id / DL / Passport, latest bank statement or Utility Bills as address proof.
As a Limited Liability Registration procedure in India to totally online, the most important and basic requirement is to have digital signatures (DSC). All the forms that are required to be filed for online LLP registration in India are required to be filed after attesting through DSC of the applicant.
Before initiating the LLP registration procedure the applicant is required to reserve the proposed name. Earlier it was required to submit Form-1 for name approval. However, after the LLP (Second Amendment) Rules, 2018 were passed the name reservation process has been changed. The applicant can either get the name approved directly with incorporation or they can file for name approval through RUN- LLP service available on the MCA portal. Here, RUN is an abbreviation for reserve Unique Name facility.
One point to be kept in mind is that the name must not be similar to any registered LLP, company or trademark.
After name approval, the applicant is required to submit LLP registration application through Form fill up available on the MCA portal. earlier this application was submitted through Form-2.
A partnership agreement must be executed by the partners defining the roles, responsibilities of the partners, business activity etc.
What are the benefits of an LLP Registration in India?
- Separate Legal Entity
- Limited Liability
- Continuity of existence
- Minimal regulatory compliance
- Tax Advantage
Limited Liability Partnership has a Separate Legal Entity from that of its designated partners. This enables the LLP to acquire assets and property on its own name and can incur debts. This is a major benefit as this helps the partners to remain unencumbered by the liabilities of the business after Limited Liability partnership registration.
Liability of Partners of the Limited Liability Partnership (LLP) firm is limited to their Contribution in the firm. It means that if the LLP suffers from any loss and faces financial distress because of primary business activity, the personal assets of Partners will not be at risk of being seized by the bank, creditors, and government.
The life of a business is not affected by the status of Partner and even after the death of the Partner, the LLP continues to exist. An LLP is a juristic person can own a property, building, car, and any other fixed assets in its name. Partners cannot claim upon the property of the LLP
LLP registration in India is most preferable by the early stage startups for doing small business and there is no need of Audit by a Chartered account if turnover is less than Rs.40 Lac and Capital contribution is not more than 25 lakh.
In an LLP, Partners can give a loan to an LLP and LLP can provide a loan to its partners. There is no restriction in receiving or providing loans. There is no dividend tax in case of LLP but in the private limited LLP, if you want to pull your profit from business profit, LLP will have to pay the dividend distribution tax, which is exempted from tax in the case of an LLP. This is a big advantage to opt for LLP registration.
How can Enterslice help in LLP Registration in India?
Enterslice is a leading organization for providing Limited liability partnership registration in India. We have years of experience and experts with industry insights and knowledge of all the latest laws. you can consult us for LLP registration services. We facilitate hassle-free LLP registration in India. All you have to do is follow this simple procedure:
- Visit our website ad post an inquiry by clicking on ‘Request a call back’ section for LLP registration. Only basic information is required to be put in for the same.
- As soon as your query is generated somebody from our team will give you a call back in 2-3 days’ time period and provide you with the necessary consultation for Limited Liability Partnership registration.
- If you still have any doubt please contact us at email@example.com.
- Once all your queries are sorted we will generate your unique order number. You can track real-time progress of your work through this unique order number.
- You can make the payment and submit the required documents through email or you can also submit them using Enterslice Mobile app is available on Android and Apple App Store.
- As partial payment and required documents are received your order will be assigned our experts in service team for starting the Limited Liability Partnership registration process.
- Our team will give you updates on every step of the LLP registration process. In case of any issues, feedback or complaint you can reach out to us at firstname.lastname@example.org
Factors influencing Name Selection process of LLP Registration in India?
While you are finalizing the name before initiating LLP registration process there are certain crucial points to be kept in mind. We have prepared the following list of such factors:
- Concise & Easy
- Must be Unique
- Must be Non-Offensive
- Must not be illegal
While choosing a name for Limited Liability Partnership registration the applicant must make sure that it’s simple yet meaningful and have a recall value to help creat a brand value for the business.
The applicant cannot do LLP registration in India with a name similar to any already registered LLP, company or trademark. Therefore they must choose a unique name for the LLP. However, in case any such already registered Company, LLP or trademark owner provides a NOC stating that they have no objection then a similar name can be applied for.
Proposed name of the LLP must be relevant and portray the business activity proposed to be carried on after LLP registration.
Every Limited Liability Partnership’s name must end with ‘LLP’.
The name shall not be offensive or insulting to any religion, culture or group of people.
It is important to note that the name applied for LLP registration in India must not violate any laws and is in based on the provisions of Emblems and Names (Prevention of Improper use) Act, 1950.
What are the minimum requirements for LLP Registration in India?
If you are planning for an LLP registration in India for your startup there are certain minimum requirements that must be fulfilled. They are:
- Minimum 2 Designated directors are required.
- A partnership Agreement must be drafted and registered with MCA after successful LLP registration
- No minimum capital requirement. Nowhere in the provisions of the Limited Liability Partnership Act, 2008 any minimum contribution requirement is specified.
What are the documents required for LLP registration in India?
For LLP registration in India the following set of documents is required.
From All Designated partners/ Partners
- PAN Card or Passport or Election ID Card
- Aadhar Card of all partners
- Latest Bank Statement/Telephone or Mobile Bill
- Voter's ID/Passport/Driver's License
- Passport-sized photograph of all directors and shareholder
For Proposed Registered office (Residential or commercial)
- Latest Registered Proof Adress (electricity bill or property tax receipt or water bill or landline bill)
- NOC from owner
- Scanned copy of Notarized Rental Agreement if the property is rented
What is the LLP registration procedure in India?
If you are planning for LLP registration in India you are required to follow the following steps:-
Apply for Digital Signature Certificate (DSC)
All Proposed Designated Partners/ Partners of the LLP should have a digital signature (DSC) as this digital signature will be used to file the registration, ROC compliance forms, and Tax returns.
File for Name Approval form to ROC through LLP (Reserve Unique Name) RUN facility available on the MCA portal. Maximum 2 names can be applied through this method. It takes 3 working days to get name approval from the Registrar of LLP. The name must be selected keeping in mind the above-mentioned factors.
Filing of Incorporation Application
After successful name approval of the LLP, incorporating application is required to be filed through e-Form fill up. Details of the Proposed designated Partners/ Partnersare to me filled in and all the supporting documents must be submitted as attachments.
File Partnership Agreement
As soon as Limited Liability Partnership registration is completed and Certificate of registration is received from MCA the applicant is required to submit a duly notarized partnership agreement with MCA through e-Form-3.
File Pan Application
As LLP registrationprocedure is completed our team will file PAN Application for your newly registered LLP and provide you with all the details and relevant documents.
Note: Earlier before filing for name reservation applicants were required to acquire Designated Partner Identification Number (DPIN). However, this requirement has been removed in LLP (2nd Amendment) Rules, 2018. Now, DPIN is directly allotted along with successful LLP registration in India by MCA.
Is FDI allowed in LLP Registration in India?
Earlier there were some restrictions specified in relation to Foreign Direct Investment at the time of Limited Liability Partnership registration in India. However, through a notification passed on 10th, November 2015 some major changes were introduced in Foreign Direct Investment regulations.
- Following are the FDI regulations relating to LLP registration in India:
- As per these amended regulations, not 100% Foreign Direct Investment is possible at the time of LLP registration through Automatic Route.
- This 100% FDI is allowed only for such LLPs which belong to the sector/ industry where 100% FDI is permitted via automatic route.
- No performance linked conditions are specified against such Foreign direct investment.
- Such LLPs which receive FDI are permitted to make downstream investments in organizations (companies as well as LLPs) which belong to sectors where 100% FDI is allowed.
What is the LLP Registration Fee in India?
LLP registration procedure can be completed in a time span of 10 to 12 days in India. Our team of experts at Enterslice provide the best consultancy services and along with that fast and efficient LLP registration service. The detailed breakup of the LLP registration Fee is mentioned below. It includes details of government fee as well as professional fee and other charges involved in the process.
|Digital Signature Certificate (DSC)||2||2000|
|Designated Partner Identification Number (DIN)||2||1000|
|LLP’s Name Reservation Fee||1||200|
|Notary & Stamp Charges*||1||1050|
|TOTAL COST OF LLP REGISTRATION||8,000|
*Notary and Stamp Charges differ from state to state.
What are the compliance requirements after LLP Registrationin India?
Once Limited Liability partnership registration is completed the newly incorporated LLP is required to complete following compliances. These compliances are one time in nature and are not repetitive.
- Partnership Agreement Filing: LLP registration in India is confirmed once Form fill up is approved by the MCA. However, the registration liability does not end there. The partners are required to register the partnership agreement through Form-3. This filing is to be done within 30 days from the date of LLP registration.
- Along with MCA related filing, the LLP is also required to apply for PAN and TAN. This is important as without issuance of PAN bank account cannot be opened by LLP.
- Open LLP’s Bank Account.
Annual Compliances Requirements after LLP Registration
After Limited Liability registration is done it is required to comply with annual compliance requirements under various Act irrespective of the fact if they have started a business or not. in case no transactions are done after LLP registration then NIL returns are required to be filed.
Following returns are required to be filed:
- Statement of Account & Solvency is required to be filed in LLP Form 8. this return is required to be filed by 30th October of each financial year. This return is required to be certified by a practicing professional including a chartered accountant, company secretary or cost accountant.
- Annual Return s required to be filed with the Registrar of companies in LLP Form 11.The due date for this return is set on 30th May of each year i.e. within 60 days from the closing of every financial year.
- Income Tax Return filing is another mandatory annual compliance requirement. after LLP registration every LLP is required to submit their income tax return by 30th September every year. LLP’s income tax return is submitted in prescribed Form ITR 5.
What are the Penalty Provisions in case of LLP annual compliance default?
- For MCA Filings:
- For Income Tax Filings:
As we discussed under LLP Act, 2008 it is specified that after LLP registration annual filing compliance is to be done every year. The penalty is imposed in case there is any default in filing Form 8 and Form 11 for reporting LLP’s financial statements and annual return simultaneously.
Penalty Amount: It is fixed at Rs. 100 per day for each for that is not filed. No maximum limit is specified.
Every registered LLP is required to do income tax filing under Income Tax Act along with annual filing. This filing is to be done by 30th September every year.
Penalty Amount: In case after LLP registration any LLP fails to meet this deadline then a penalty of Rs. 5,000 in imposed on it and filing is to be completed by 311th December of that year.
If the LLP fails to meet even the extended deadline then the penalty amount will double up to Rs. 10,000.
Audit Requirement after LLP Registration in India?
After LLP registration the entity is required to comply with all the provisions of the LLP Act, 2008 as well as all the relevant provisions of Income Tax Act, 1961. Following are the audit provisions specified in both the Acts that are required to be fulfilled after limited liability partnership registration;
Under Limited Liability Partnership Act, 2008
Under the LLP Act, 2008 in following two cases the LLP is required to get is financials audited from Chartered accountants:
- Annual turnover exceeds Rs. 40 lakh or
- Contribution exceeds Rs. 25 lakh
Under Income Tax Act, 1961
If in any year after LLP registration the annual turnover exceeds Rs. 1 Crore the entity is required to conduct tax audit as per Income Tax Act, 1961.