All About Limited Liability Partnership (LLP) Registration In India

LLP is one of the most favoured business structures among medium and small enterprises. It is a perfect amalgamation of a private limited company and a partnership. LLP is a simple form of business with lots of benefits as compared to other business structures. This article gives a basic overview of LLP, LLP registration process, compliance requirements, etc… and a lot more

LLP is governed by the MCA and regulated by the Limited Liability Partnership Act. Unlike general partnership the liability in an LLP is limited. Yet, the compliance requirements are less than a private company. It includes less compliance unlike in companies. It is a separate entity from partners hence it has a separate legal existence. Hence, partners are not personally liable for the debts of the firm. Further, it has perpetual succession.    

The prime advantages of registering  an LLP are:

•       Cost-effective & ease in capital generation

•       Limited compliance requirement

•       Higher credibility

•       Fewer restrictions

•       Separate legal entity

•       Limited Liabilities of the Partners

•       An Audit is not Mandatory

•       Flexibility

For LLP registration it is a must to have minimum  2 designated partners among whom one needs to be an Indian resident.

List of Documents required for Incorporation

•       In respect of Partner/ Designated Partners

  • Indian Nationals:

The Indian Nationals will require these documents:

1. PAN Card: (Self-attested by Designated Partner or Partner)

2. Voter’s ID/ Passport/ Driver’s License: (Self-attested by Designated Partner or Partner)

3. Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill: (Self-attested by Designated Partner or Partner)

4. Scanned copy of a passport-sized photograph

  •  Foreign Nationals:

1. Passport:

In case of foreign nationals,

the passport is a must.

2. Address Proof:

The Partner/ Designated Partner can attach any of the below-mentioned documents as address proof:

  • Driving Licence
  • Residence Card
  • Bank Statement
  • A government-issued form of Identity containing Address

3. Residential Proof:

The Partner/ Designated Partner can attach any of these documents which are Bank statement or any kinds of bills such as Electricity Bills, Telephone Bills, and Mobile Bills. (Apostilled and notarized document)

•       In respect of the Registered Office Address:

The registered office address proof as mentioned below shall be submitted along with the form filed for Certificate of Incorporation in the name of the Limited Liability Partnership:

  1. The document stating the full address of the property where LLP will be registered such as Electricity Bill/Property Tax Bill/ Telephone Bill etc.
  2. NOC, in case of Rented Property: The no-objection certificate along with the valid Rent Agreement by the owners of the Property.

Step 1: Procure Digital Signature Certificate

For filing the application digital signature of applicants & partners is compulsory. Hence, a DSC with 2-year validity is required to be filed.

Step 2: Reserve LLP Name

The new process requires the applicants to file the web-form RUN-LLP. The applicant has to choose a unique name to dodge  denials/ refusals .

The names must comply with the reservation. After the name is allotted, it will be reserved for a period of 90 days from date of approval.

Step 3: LLP Incorporation and DIN Application

FiLLiP (Form for incorporation of Limited Liability Partnership) is to be filed. It has made the registration easier as DIN allotment & registration is completed under one single form and is processed by Central Registration Centre (CRC). The registrar would check the document and may call for extra documents which can be sent through re-submission within  15 days.

Once the application is approved, the Certificate of Incorporation (CoI) issued, DPIN/DIN will  be allotted to the Designated Partners. Additionally, the certificate of incorporation with the Limited Liability Partnership Identification Number (LLPIN) will also be allotted.

Step 4: Apply for PAN and TAN

Step 5: Drafting and Filing LLP Agreement

Once the certificate of incorporation is issued one has to submit the LLP agreement within 30 days of incorporation. It is important to mention the details like the LLP name, business object, place of business, capital, profit sharing ratio, rights and responsibilities of partners, etc into the LLP agreement. Then the LLP Agreement is reviewed and agreed upon by the partners, it will be executed by payment of stamp duty.

Post Registration Compliance

 After incorporation, the LLP must open a current account in the name of the LLP the partners have to deposit the capital contribution as agreed. Following are the mandatory annual compliances for an LLP.

·      Filing of Annual return with MCA

·      Filing of statement of accounts and solvency with MCA   

·      Filing of form DIR-3 KYC for all partners with MCA

·      Filing of Income-tax return

Conclusion

While starting a business you need to understand the main purpose and requirement of the business. The business structure primarily affects the manner of operations, taxability and many other matters. Thus , choose the business structure prudently . LLP is an ideal structure as it provides the security and discipline of a corporate structure with the flexibility of a partnership. If these are the qualities you were looking for, you are good to register your LLP.