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LLP Registration

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LLP Registration in India

We are in an age where more and more startups are evolving and expanding. As more people are taking up entrepreneurship roles, the present rigid structure of the companies might become too much for them to manage. Due to this growing demand, there is a need for a more flexible structure where companies can thrive properly.

What is meant by a Limited Liability Partnership Company?

Limited Liability Partnership companies are a great combination of private companies and Partnership firms. Their business structure is a derivative of the benefits of the Private and Partnership companies and is much more suitable when it comes to ease of business doing. The LLPs serve as an alternative business entity and function by mutual agreement between the partners. However, any single partner cannot be held accountable for the poor conduct or negligence of the other partners.

Structure of LLP

Limited Liability companies provide more protection to the partners and there is no liability on them. These firms make the partners immune from facing any personal liability in cases of debts, misconduct, or any wrongful acts, and the owners are held liable only up to their investments.

Requirements of LLP Registration

In the formation of a Limited Liability Partnership firm, the following requirements help:

  • For starting an LLP firm, a minimum of 2 partners is required.
  • All the partners must have a valid Digital Signature Certificate.
  • Digital PIN Identification Number of all the partners.
  • Minimum paid-up capital by the partners.
  • LLP agreement between the partners.
  • Proof of the registered office of the company.

How to Register a Limited Liability Company Online With FilingLounge?

  • To register a Limited Liability Partnership firm, visit the website FilingLounge and under the Business Formation tab, select Limited Liability Partnership(LLP) from the drop-down menu.
  • Next, fill in all the basic details (Name, Mobile Number, Email ID, Address, state) that are given on the registration form and click on the Submit button.
  • Thereafter, you will receive a call shortly from our executives to carry forward with the application process.
  • We, at the filing lounge, charge a nominal fee of Rs. 7899 and all you have to do is sit back and relax and everything is done on your behalf by our team of experienced professionals.

Advantages of A Limited Liability Firm

  • LLPs are flexible-Limited Liability firms come with various flexibility options when it comes to tax payment. The income is taxed at the individual level and not at the company level. If the member chooses to be taxed as a partnership, the income gets described among the members. This type of flexibility is the characteristic feature of LLPs.
  • LLPs are organized-These partnership firms are better organized as well as structured and operate as an agreement between its members.
  • Easy to incorporate-Limited Liability Partnership firms have quite a lower cost of incorporation and are easily formed too.
  • Protection to the partners-Limited Liability Partnership firms operate as a separate entity and they assure their partners that they would not be held responsible for any debts or misdeeds of the other partners or any mishaps in the business.
  • No specific minimum capital- LLPs are quite beneficial to the extent that they don't require a specific amount as the paid-up capital. The owners have the freedom to choose from which amount they want to start.
  • LLPs are freer in their operations-When it comes to the legal side, the LLPs are imposed with fewer restrictions and don't have to abide by the compliances.
  • No mandatory audit-LLPs have this biggest advantage that they don't need to get an audit done necessarily. LLPs need to get the company accounts checked only. When the capital exceeds Rs. 25 lakhs, or, When the annual turnover exceeds Rs. 40 lakhs.
  • No restriction on the number of partners-Although LLPs need to be formed with a minimum of 2 partners, there is no specification on the maximum number of partners it can have.
  • LLP is the sole entity-Although LLPs need to be formed with a minimum of 2 partners, there is no specification on the maximum number of partners it can have.

What Is The Difference Between a Limited Liability Partnership Firm and a Traditional Partnership Firm?

  • A partnership is a joint venture of people for earning profit and is owned either by one or all the partners whereas an LLP is a joint body comprising the features of a partnership firm as well as a corporate body.
  • Traditional Partnership firms follow the regulations of the Indian Partnership Act, of 1932 while LLPs are managed by the Limited Liability Partnership Act, of 2008.
  • The partnership firm is guided by the partnership deed while an LLP agreement is called a charter document.
  • Traditional partnership firms have to bear the burden of unlimited liability on the partners while LLPs come with a limit on the partners' liability.
  • LLPs follow the policy of perpetual succession while Partnership firms can be discontinued at any time.

Conclusion

Limited Liability firms are indeed life saviors if you are willing to get into an agreement-based business. FilingLounge is an excellent portal. if you want regular updates, follow our Facebook page for more information on different kinds of businesses.

Related Guides

Documents Required For LLP Registration

Proprietorship vs Limited Liability Partnership (LLP) vs Company

Features Proprietorship Partnership LLP Company
Definition A sole proprietorship is an unregistered business entity managed by a single individual. A legal contract between multiple parties to jointly manage and run a business operation. A business type that combines aspects of a partnership and the limited liability of a corporation. A registered business where owners and shareholders have limited liability.
Ownership
  • Single individual
  • Min 2 Partners
  • Max 50 Partners
  • Designated Partners: Min 2(No upper limit)
  • Min: 1 shareholder (for a private company), 7 shareholders (for a public company)
  • Max: 200 shareholders (for a private company), no upper limit (for a public company)
For One Person Company
  • Minimum: 1 individual
  • Maximum: 1 individual
Registration Time 7-10 working days
Promoter Liability Unlimited Liability Limited Liability
Documentation
  • Partnership Deed
  • PAN card of the partnership firm
  • LLP Agreement
  • Incorporation Certificate
  • PAN card of the LLP
  • MOA
  • AOA
  • Certificate of incorporation
  • PAN card of the company
Governance No specific governing law Governed by the terms outlined in the partnership deed Governed by the LLP agreement Governed by a formal structure including a Board of Directors
Transferability Business cannot be transferred Ownership transfer requires the consent of all partners as outlined in the partnership deed. Transferable Easily Transferable for public companies. In private companies, there might be some restrictions.
Compliance Requirements
  • Income tax filing if the turnover exceeds Rs. 2.5 lakhs.
  • Must file ITR 5
  • Must file ITR 5
  • File Form 11
  • Form 8
  • MCA filing
  • Auditor's appointment
  • File ITR 6

LLP Company FAQ's

Which other countries follow the LLP structure?

LLPs are famous in countries like the United Kingdom, the United States of America, Australia, Singapore, and Gulf nations.

Is LLP diferent from a company?

Yes, LLPs are more flexible and have fewer requirements than joint stock companies. Also, the LLPs are managed and governed by the partnership agreement among the partners while joint companies are regulated by the Companies Act, 1956.

Can people of foreign origin constitute an LLP?

Yes, people of foreign origin including foreign nationals or companies can form an LLP in India on one condition that one of the partners should be an Indian National.

What happens if the minimum number of partners is reduced?

If by any means, the minimum number of partners falls below two, and the business continues for a further six months, ten the single person or the owner shall be held accountable for any obligations.

Can an LLP file for an annual return?

Annual returns must be filed by LLPs in Form 11 with the Registrar of Companies (ROC) within 60 days of the closure of a financial year. The returns will be available for public inspection only after the deposition of the specified fee with the ROC.

How can a partner cease to be one in an LLP?

Any existing partner can cease to continue with the firm by giving prior notice to the ROC before 30 days. However, the person can cease to discontinue his partnership in the following cases:
  • On his death or discontinuation of the LLP
  • If the person is declared incapable of managing a business by a court
  • If he has been declared bankrupt

Can an existing company be converted into LLP?

Yes, definitely. By complying with the provisions of Clause 58 and Schedule III and IV of the LLP Act, an existing company may be converted to an LLP. Also, Form 18 and Form 2 need to be filled up too.

What suffix is added to LLP firms?

LLP firms have to add the suffix “Limited Liability Partnership”.

Related Business Registrations

In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.

FSSAI Registration
IE Code
Trademark Registration
Copyright Registration
Salaried Tax-filing
GST Return Filing

MCA Compliance

Each registered entity is required to meet its compliance duties at the close of each financial year. This generally includes auditing financial statements, filing income tax returns, and submitting annual forms to the Ministry of Corporate Affairs (MCA).

Compliance For Form Due date Penalty
Commencement of Business Intimation to Registrar for Commencement of Business Within 180 days from incorporation INR 50,000 on company and INR 1,000 per day on directors for each day of default
Annual KYC of Directors DIR 3 E-KYC 30th September of every year INR 5,000 for late filing
Appointment of Auditor Form ADT 1 Within 15 days of the AGM INR 300 per day (max INR 12,000)
Financial Statements Form AOC 4 Within 30 days from the AGM INR 100 per day of default
Annual Return Form MGT 7 Within 60 days from the AGM INR 100 per day of default

All Limited Liability Partnerships (LLP) in India must file annual returns with the Ministry of Corporate Affairs (MCA). FilingLounge provides affordable services to help you keep your LLP compliant.

LLP Compliance Form Due date Penalty
Annual KYC of Directors DIR 3 KYC 30th September of every year INR 5,000 for late filing
Annual Return Form 11 May 30th every year INR 100 per day of default
Statements of Accounts and Solvency Form 8 30th October every year INR 100 per day of default (minimum penalty INR 10,000)

In addition to the filings listed above, there may be other compliance requirements relevant to LLPs. To ensure all compliance needs of your LLP are met, please seek assistance from a Filinglounge Advisor.

Entity Compliance Form Due date
Private Limited Company Annual Return MGT-7 Within 60 days from the conclusion of the AGM
Financial Statements AOC-4 Within 30 days from the conclusion of the AGM
DIR-3 KYC DIR-3 KYC 30th September every year
Return of Deposits DPT-3 30th June every year
Appointment of Auditor ADT-1 Within 15 days from the conclusion of the AGM
Income Tax Return (Non-audit case) ITR-6 31st July every year
Income Tax Return (Audit case) ITR-6 30th September every year
Annual GST Return GSTR-9 31st December of the subsequent financial year
MSME Form Form 1 (MCA) half-yearly return by 31st October (April to September), & 30th April for the period October to March every year
Limited Liability Partnership Income Tax Return (Non-audit case) ITR 5 31st July every year
Income Tax Return (Audit case) ITR 5 30th September every year
Annual Return Form 11 30th May every year
Financial Statements Form-8 30th October every year

Note : There might be extra filings needed depending on your business type and activities. Talk to a FilingLounge advisor to get the right guidance for your company's compliance.