Starts Limited Liability Partnership from ₹ 10999/
Limited Liability Partnership Registration
The Parliament of India enacted the Limited Liability Partnership Act, 2008 on 12 December 2008 which came into force on 31 March 2009. It was enacted in order to provide the blended composition of partnership and corporation together as well as to provide a solution to the problem of excessive liability over the partners in a partnership.
The term Limited Liability Partnership means a partnership in which few or all of the partners have limited liability in terms of financial obligation towards the business on a personal level.
What and why Limited Liability Partnerships (LLP)
LLPs are just like partnerships, the only difference is that the partners and the business are separate legal entities and they have limited liability.
In a partnership the partners suffer as they have unlimited liability which means that in case of loss, they would have to sell their own assets for the payment. This is why Limited Liabilty Partnership was brought into being as a solution to this issue.
Definition of LLP
According to Section 2 of this law, an LLP is a partnership registered under the Act. Further, an LLP agreement means a written agreement either between LLP partners or between the LLP itself and its partners. This agreement defines the rights, liabilities, duties, and powers of the partners.
After the emergence of Limited Liability Partnership act, 2008 the LLPs are specifically governed by this act. The provisions of Indian Partnership Act, 1932 are not related to Limited Liabilty Partnerships.
Features of an LLP
A limited liability partnership contains the following features:
- Separate legal entity
Limited Liability Partnerships are considered as Separate legal entities unlike Partnerships. A limited liability partnership as a separate legal entity can own its own assets and liabilities.
- Limited liability of partners
In a Limited liability partnership the partners have limited liability. Their assets are not liable to be attached in case of insolvency or legal consequences of failure of payment.
However, their liabilities can become unlimited in case of fraud, the commission of an offense, or any other wrongful and illegal act.
- Sharing of profits
The sharing of profits in a Limited Liability Partnership is just like it is shared in a regular partnership. The partners can set the profit sharing ratio as per their requirements.
- Partners of LLPs
Partners can be individuals or even corporate bodies. A person of unsound mind or an insolvent person cannot be a partner.
There must be two partners in a Limited Liability Partnership and that number can go upto 50 partners. If suppose only one partner remains, he/she will run the partnership for more than 6 months and his/her liability becomes unlimited
Advantages to registered Limited Liability Partnership (LLP)
Following points highlight the eligibility criteria for registration of LLP in India.
- Minimum 2 partners – There should be a minimum of two partners, the maximum number of partners can reach upto 50.
- Atleast 1 to be an Indian citizen – Amongst the partners atleast one of them shall be a resident of India.
- Shall be individuals – Both the partners involved shall be individuals.
The method of LLP registration in India does not require much legwork when it comes to documents.
To Be Submitted By Partners
1. Scanned copy of PAN Card or passport (Foreign Nationals & NRIs)
2. Scanned copy of Aadhar Card/ Voter's ID/Passport/Driver's License
3. Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
4. Scanned passport-sized photograph Specimen signature (blank document with signature [partners only])
Note: Any one of the partners must self-attest the first three documents. In the case of foreign nationals and NRIs, all the documents must be notarized (if currently in India or a non-Commonwealth country) or apostilled (if in a Commonwealth country).
For The Registered Office
1. Scanned copy of latest bank statement/telephone or mobile bill/electricity or gas Bill
2. Scanned copy of Notarised Rental Agreement in English
3. Scanned copy of No-objection Certificate from the property owner
4. Scanned copy of Sale Deed/Property Deed in English (in case of owned property)
Note: Your registered office need not be a commercial space; it can be your residence, too.
Step 1 : DIN, DSC & Name Approval 1-7 Days
Step 2 : Submission of Form 2 8-14 Days
Step 3 : Submission of Form 3 & 4 15 to 19 Days
Step 4 : Certificate Of Incorporation 20 to 30 Days.
- 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
FAQ
An LLP agreement governs the relationship between the individual partners in the LLP and is made between the partners and the LLP. An LLP agreement often includes management guidelines, provisions for adding new partners, methods for formulating policy, etc.
One can use the Form 3 to file an LLP agreement.
Yes, running an LLP is far less expensive than running a private limited business, especially in the beginning. This is so because certain compliances, like an audit, only apply to LLPs if they have a sizable turnover. In their first year, LLPs typically spend half as much on registrations and compliance tasks as a private limited company does.
Any group of persons who have or want to invest money in a business can start an LLP. A person or an investor becomes a partner, according to the LLP agreement, as provided in the Act of 2008. Also, the investors/partners are owners of the business started under the LLP.
Any individual, or even a company or an LLP, can become a partner. However, in an LLP, only one person can hold the title of “designated partner.”
No, a Limited Liability Partnership is not a company, while sharing many characteristics with one, such as the benefits of Limited Liability and Separate Legal Entities.
Before applying for LLP incorporation, you must reserve the name of an LLP. You can do so by filing LLP FORM No.1 (Application form to reserve or change the name of an LLP).
