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Online LLP Firm Registration in India

Overview of LLP Registration in India ?

Limited Liability Partnership is the most preferred business structure by many entrepreneurs due to the reason that it provides benefits of both a company and a partnership. An LLP is governed by the Limited Liability Partnership Act, 2008, and as per the LLP agreement signed by the partners. Two major reasons that differentiate it from a partnership and that an LLP has a perpetual succession and the liability of its partners is limited. 

The basic requirement for incorporating an LLP is that it must have a minimum of two partners and a maximum it can have any number of partners. Therefore, registering an LLP can be an easy process, if you have an experienced team by your side to help with you with the registration process. PSR Compliance is committed to guiding you towards success and getting your LLP firm registration in the most effective manner. 

Characteristics of an LLP

The characteristics or features of an LLP are listed below:

Continued Succession

A limited liability partnership has the benefit of permanent succession. This implies that the LLP can go on with its business activities even in the event that one or more partners retire, go bankrupt, become mentally incapacitated, or pass away. 

Separate Legal Entity

Similar to a company, an LLP is a distinct legal entity. It is entirely responsible for its debts and possessions and is treated differently from its partners. 

Limited Liability

The liability of every partner of an LLP is limited to the amount as agreed between them. Therefore, no one can claim any amount from their personal assets in the name of LLP. 

LLP Agreement

Every partner signs the LLP Agreement, which outlines their responsibilities and rights. If an LLP does not have an LLP agreement, the Act will govern their respective rights and obligations.

Mutual Agency

In an LLP, unlike a partnership business, one partner's autonomous and unauthorized activities do not impose liability on the other partners. Every partner is regarded as the LLP's agent, and no partner's decisions are binding on the other partners.

What are the benefits of an LLP?

Here are a few benefits of an LLP, that will make you understand why LLP would be an ideal choice for your business needs:

Less Compliance and Cost

If you compare the cost of LLP incorporation with other business structures, the cost of LLP registration is very less. Moreover, there are very few compliances that an LLP has to follow. The Annual Return and the Statement of Accounts and Solvency are the only two statements that the LLP is required to file each year.

No Minimum Capital Requirement

A minimum capital requirement is not necessary to incorporate an LLP. Whereas, an LLP can be incorporated with any amount of capital contributed by the partners. 

No Taxes on LLP

 LLPs are subject to pass-through taxes, meaning that the partners bear the direct taxation of the LLP's revenue. By doing this, businesses that divide their gains to shareholders avoid paying double taxes.

Flexible structure

 When it comes to ownership and management structures, LLPs are comparatively adaptable. The shares of one partner can be transferred to another easily and the management of the partnership is decided by its partners only. 

What are the requirements for LLP Registration?

For LLP registration in India, the following requirements must be met:

  • The name of any LLP must be unique and not similar to any other registered company, LLP, or trademark. 
  • A minimum of two partners is required for LLP incorporation. 
  • DSC and DPIN for the designated partners of an LLP. 
  • There must be a properly signed agreement between the partners. It must reflect the rights and liabilities of the partners. This agreement is known as LLP agreement, 
  • Proof of LLP?s registered office. 
  • The partners of LLP must contribute some amount of capital for LLP incorporation. 

What are the documents required for LLP Registration?

To register an LLP, two sets of documents will be required, that is documents of the partners and documents of the LLP. The important documents that will be required at the stage of incorporation are listed below:

Documents of Partners 

Every partner of the Limited Liability Partnership will be required to submit the following documents:

  • PAN cards and identity documents for each partner.
  • Provide address proofs for all the partners, such as driver's license, passport, or voter ID.
  • Partner's passport-sized photograph on the white backdrop.
  • If any foreign citizen or NRI wish to join the LLP, then their passports are also required.

Documents of LLP

The LLP is required to mandatorily submit the following documents for registration: 

  • At the time of registration or within 30 days of the LLP's incorporation, documentation of the registered office of address must be provided. 
  • If the registered office is located in a rented space, the landlord's NOC is required.
  • Proof of address of business is also required. You can provide a utility bill, but that shall not be two months old. 
  • A Digital Signature Certificate (DSC), is required for signing the important documents of the LLP. 

What is the process of registering an LLP in India?

The procedure of registering for an LLP in India is not complex as it requires less compliance. Take a look at the steps below to understand the whole process:

Step 1: Obtaining a Certificate of Digital Signature (DSC)

Getting the digital signatures of each of the LLP's selected partners is the first stage in registering the LLP. All documents submitted by the LLP must have a digital signature. The digital signatures on all the important documents facilitate the registration process and take relatively less time. 

Government organizations with certification, such as the National Informatics Center, IDRBT Certifying Authority, E-MUDHRA, CDAC, and NSDL, can provide the necessary digital signatures. Your application will determine the cost that you'll have to bear for availing this certificate. 

Step 2: Select and reserve a unique name for LLP

The applicant must fill in the Limited Liability Partnership-Reserve Unique Name (LLP-RUN), which may be processed at the Central Registration Center, to register a proposed limited liability partnership. It is generally suggested to look for the existing names on the Ministry of Corporate Affairs (MCA) website, and then submit a name that is not already registered. This makes the registration process smooth and fast. You will already have a list of businesses that have the same name as the name selected for your proposed limited liability partnership. Make sure that the name you select, must not be same or resemble with any existing company. In order to reserve a name, file the LLP-RUN form with the requisite fee. 

Step 3: LLP Incorporation

In order to incorporate an LLP, the Limited Liability Partnership (FiLLiP) form must be completed and filed with the registrar along with the payment of a requisite fee. This application shall be filed by two individuals.

Step 4: Submit the LLP Agreement

The partners' rights and obligations are governed by this agreement. Form 3 of the agreement may be submitted electronically via the MCA PortalFile the Form-3 within thirty days of incorporation and register the LLP agreement on the stamp paper where the LLP is incorporated. Therefore, you are also required to look at your state norms while incorporating an LLP in India. 

Step 5: Grant of Incorporation Certificate 

After properly verifying the application and documents submitted, the registrar issues the certificate of incorporation and the LLP firm comes into existence. 

Why LLP is preferred over a Partnership?

There are certain points that make business owners prefer LLP over partnership: 

  • First and foremost, an LLP combines the features of both a company and a partnership. 
  • The liability of all the partners of the partnership firm is limited. Whereas, the liability of partners in a partnership firm is unlimited, which means their personal assets can also be used to pay the losses of the firm. 
  • In LLP, there is no restriction on the maximum number of partners. On the other hand, in a partnership, there can be a maximum of 50 partners. 
  • Registering a partnership firm is not mandatory, and if the partners want, they can register their firm with the Registrar. In contrast, an LLP is registered with the Ministry of Corporate Affairs.
  • LLP business structure is seen as more credible or reliable as compared to the partnership business. 

How much time is required for LLP registration?

The time taken for registering an LLP depends upon the departmental approval and the accuracy of the application filed. Moreover, the process starts with getting a DSC by filing Form-3. In most cases, the process takes between 10 to 15 days. Well, there is no need for you to take any burden when PSR Compliance is there to handle the whole registration process. 

For knowing the exact time and details required in the LLP incorporation process, please contact our experts and initiate the process most effectively. 

How PSR Compliance can help you with LLP Registration?

You might have heard that the process of LLP registration is less complex as compared to other business registrations and this is absolutely true. But, the more accurate your registration will be, the less problems you'll face in the future. It is very important to adhere to the necessary compliances and then process ahead with incorporating an LLP. Not only this but even after the registration process is complete, an LLP must make sure that it complies with every requirement of law. 

Therefore, our experts are knowledgeable enough to meet all the regulatory compliance and guide you through the same. We'll help you get the registration on time without any unnecessary delays. 

Frequently Asked Questions

Is it mandatory to register an LLP?

Yes, as an LLP is governed by the LLP Act, 20008, it is important to register an LLP on the website of the Ministry of Corporate Affairs. 

What to do if only one partner is left in an LLP?

If only one partner is left in an LLP, then the LLP can normally operate for six months and search for another partner. If even after six months, the LLP still has one partner, then that partner will become personally liable for the acts of an LLP. Moreover, the NCLT may also wind up such an LLP. 

What is an LLP Agreement?

An LLP agreement is a document signed between the partners, in which the rights and liabilities of every partner is mentioned. Every partner and the LLP must adhere to this agreement. 

Can I add more partners in LLP after its registration?

Yes, you can add or remove partners in the LLP with respect to the LLP agreement and while following the local laws and regulations of the state where the LLP has been incorporated. 

Do I need MOA and AOA for LLP incorporation?

LLP has the features of a company, but it is not a company registered under the Companies Act, 2013. Therefore, it does not require MOA and AOA for incorporation.