Limited Liability Partnerships
Private limited company is the most preferred corporate entity amongst small, medium and large businesses in India due to various benefits. e4efilings help you enjoy all these benefits with quality online consultancy services at just Rs. 14999/- (All Inclusive)
What is a Limited Liability Partnership?
Limited Liability Partnership (LLP) was introduced in India by way of the Limited Liability Partnership Act, 2008. The basic premise behind the introduction of Limited Liability Partnership (LLP) is to provide a form of business entity that is simple to maintain while providing limited liability to the owners
The main advantage of a Limited Liability Partnership over a traditional partnership firm is that in a LLP, one partner is not responsible or liable for another partner’s misconduct or negligence. A LLP also provides limited liability protection for the owners from the debts of the LLP. Therefore, all partners in a LLP enjoy a form of limited liability protection for each individual’s protection within the partnership, similar to that of the shareholders of a private limited company
LLP is one of the easiest form of business to incorporate and manage in India. With an easy incorporation process and simple compliance formalities, LLP is preferred by Professionals, Micro and Small businesses that are family owned or closely-held.
Advantages of Registering a Limited Liability Partnership
Separate Legal Entity
An LLP is a separate legal entity from its owners. In other terms an LLP can purchase assets, borrow debts in it’s name moreover an LLP can sue any individual or any other entity and an individual or any other entity can also file suit against an LLP. Most important benefit that LLP provides a covering of Limited Liability to it’s Parnters.
A limited liability partnership has ‘Perpetual succession’ that means even the owners of a LLP dies or ceases to be Partners or even it’s ownership is changed. It stays alive and shall enjoy uninterrupted existence until it is legally dissolved.
An LLP does not require audit if it has less than Rs. 40 lakhs of turnover and less than Rs.25 lakhs of capital contribution. Therefore, LLPs are ideal for startups and small businesses that are just starting their operations and want to have minimal regulatory compliance related formalities
The ownership of a LLP can be easily transferred to another person by inducting them as a Partner of the LLP. LLP is a separate legal entity separate from its Partners, so by changing the Partners, the ownership of the LLP can be changed
An LLP being an artificial judicial person, can acquire, own, enjoy and sell, property in its name. No Partner can make any claim upon the property of the LLP – so long as the LLP is a going concern
Frequently Asked Questions
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What Documents are required for LLP registration?
- Scanned copy of PAN Card or attested scanned copy of Passport if you are an NRI or a Foreign National
- Scanned Copy of Voter’s ID/Passport/Driver’s License
- Scanned Copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
- Ofcourse a scanned Passport Sized Photograph of yours
- Specimen signature on a blank document of proposed Partners
What is the Process of LLP registration in India?
- First step is to create Digital Signature Certificate or DSC and atleast two of them will be required to in order to obtain Designated Partner Identification Number or DPIN
- Name approval for your proposed LLP
- Approval and your LLP is now incorported and a certificate has been issued along with your PAN as well as TAN by ROC for the same
What is a DSC or Digital Signature Certificate?
The DSC is an instrument issued by certifying authorities by which you can sign electronic documents. As all documents needed are electronic, So we are going to need a DSC for each Proposed Director (Don’t worry the process for getting a DSC is too easy and we help you get it)
What problems I might face while getting my LLP's name approved?
- First ensure that your name is available
- Try not to pick a name that is too well-known. For E.g. Flipkart is a well known company so the ROC might reject your application even though you have separate set of business objectives
- Do not use any abbreviations, adjectives and generic words because they are straight away rejected. For E.g. If you Choose a name like ABC, XYZ or BBC it’ll be rejected. The word Bank, Exchange, coorporation, Nidhi, stock exchange will be rejected unless you take proper permission from relevant authority
- Do not pick a name that is registered by any other entity as trademark. However if you are able to get an NOC (Non Objection Certificate) from that entity you might get that name approved
How many Partners can be there in an LLP?
Minimum 2 Partners are required to register an LLP with no maximum limit
How much amount of money is required to invest in the beginning?
Good news is that in India you do not need to have any paid up Capital that means you don’t have to introduce any money into the LLP