Limited Liability Partnership (LLP) Registration in India
What is Limited Liability Partnership?
Trending observation has been acknowledged, is that new entrepreneurs are moving towards to opt Limited Liability Partnership (LLP), but what can be the main highlight for choosing a LLP as a form of organisation?
It is the type of organisation which is more preferred nowadays as it gives entrepreneurs both the benefits of partnership and company into a single form of organisation.
LLP has a separate legal entity just like firms. The name suggests limited liability partnership , the liability of each partner will be limited to the contribution they had made. The cost of forming LLP is comparatively less than other forms of organisation.
To incorporate LLP, minimum number of partners required are two and one of them should be an Indian resident. All the rights are governed by the LLP agreement. To start a firm under LLP, entrepreneurs need to insure themselves under the LLP Act 2008.
Benefits of Registering under LLP Act 2008
After deciding upon the business model, it is important to look at the key benefits of registering under LLP agreement. By registering under the LLP Act, the entrepreneurs get the following benefits:
Owners will be entitled to the small amount of debt incurred by them.
If the existing LLP goes bankrupt there will be no harm to the personal assets of the partners.
It is a separate legal entity and follows the perpetual succession law.
The ownership of the LLP can be transferred easily.
LLP is suitable for small businesses. The capital contribution amount is less than 25 lacs.
Process of Registering a LLP
Step 1 : Digital Signature Certificate (DSC)
In order to register a LLP company, it is crucial for company members/partners to have a Digital Signature Certificate (DSC). The DSC should be obtained from the government only then can the certificate be issued to them.
Step 2 : Director Identification Number (DIN)
The partners of a company need to apply for DIN including partners intending to join the LLP. The form has to be signed by the company secretary(full-time) or by a managing director or CFO of the existing company from which the candidate shall be appointed as a director.
Step 3 : Reservation of the Name
For reserving a name of a LLP, it needs to file under RUN (Reserve Unique Name) which will be processed by the central registration center. The name of the LLP should not be similar to the existing companies. The final step is approval from the Registrar which is done after submission and payment of the form.
Step 4 : Incorporation of LLP
Form of incorporation of limited liability partnership shall be filed with the Registrar, who has jurisdiction over the state in which the registered LLP office is situated.
Fees according to Annexure 'A' shall be paid.
This form also helps in applying for DPIN, for those who are not appointed as the designated partner and who do not have DIN.
Application for allotment shall be allowed by the two individuals only.