LLP Company Registration: What You Need to Know

Overview

The Limited Liability Partnership is a popular option among businessmen as it combines the benefits of both a partnership firm and a corporation into a single company. In a LLP you can enjoy the benefits of both partnerships along with limited liability business.In India, it can be established by 2 or more partners. In this only one person is not responsible or liable for the misbehaviour or carelessness of another partner. It shares all the characteristics of a traditional partnership firm, with the same legal entity. Limited liability offers separate legal identity from their participants. Furthermore, company’s partners are only liable to a limited extent. It comes under the Limited Liability Partnership  Act, 2008. You can get in touch with Apkatax to register your LLP company. 

Benefits of Limited Liability Partnership (LLP)

• Low Cost and Low Compliance: LLP is an affordable formation with minimal compliance requirements.

• Easy Ownership Transformation: By registering as a LLP company, it’s become easy to transition to company ownership. 

• Separate Legal Entity: Limited Liability Partnership (LLP)  provides a distinct legal identity.

• Easy Management of Business: As an LLP company it is worked according to the Limited liability partnership (LLP) Agreement terms and conditions. Also, the company’s partners can choose among themselves and appoint the designated partners of the company as a single authority to govern the management. 

• Limited Liability of Partners: Partners are liable only for their contributed amount in the business, as it helps to safeguard their personal assets.

• Perpetual Succession: LLP has a perpetual succession, it means if the company partners  leaves or dies it does not affect the entity as the LLP continues to work. 

•  Attracts Investors for the Entity:  Limited liability partnership (LLP) has a separate legal identity that attracts the investor and enhances  the credibility of the company. The investor always inspects the company data before investing their capital into it.

• No Minimum Capital Requirement: If you want to establish a LLP then you can form it without a minimum capital.

Eligibility for LLP Registration:

• Minimum of two partners required in an LLP.
• Corporate partners must be represented by a natural person.
• Digital Signature Certificate (DSC) required for all partners.
• Companies should have unique names, not duplicate existing companies.
• Each company partner must agree to contribute capital.
• At least one partner of the company needs to be an Indian.
• Partner’s age should be 18 to 65.

Procedure for LLP Registration:

If you want to start a LLP company then you must follow these given below steps:- 

Step-1: Obtain DSCs for All Partners:-  You need to obtain Digital Signature Certificates for all partners as they are essential documents for completing the LLP registration. To become a partner of a company you must have DSC.

Step-2: Select & Reserve Limited liability partnership (LLP) Name:- As a next step you need to choose a different name for your Limited Liability Partnership (LLP) company. While choosing an LLP name you need to  follow the guidelines of the Ministry of Corporate (MCA) government website. Once you select the name for your company then you need to get it approved and reserved by the Registrar of Company (ROC). For this, you need the FiLLiP or the RUN-LLP (Reserve Unique Name) forms. You will get both forms available on the government Ministry of Corporate (MCA)website. 

Step 3: Online Application for LLP Registration:- You can do Limited Liability Partnership (LLP) Registration completely online on the government website of the Ministry of Corporate (MCA). Once you get the FiLLiP application form then you need to provide all the information as per the guidelines. You need to submit all the necessary documents including Digital Signature Certificate (DSC) and pay the prescribed government fees. 

Step 4:  Apply Certificate of Incorporation for your Limited Liability Partnership (LLP):- After you apply for the LLP registration then it needs to be examined by the registrar of the Company (ROC). Once your application gets approved the ROC will quickly release Certificate of Incorporation for your Limited Liability Partnership to confirm its registration. 

Step 5: Submit Limited Liability Partnership (LLP) Agreement:- At the end you need to submit the Limited Liability Partnership (LLP) agreement as it is an essential constitution document of the LLP that contains the terms and conditions mutually agreed between the LLP partners. This agreement needs to be submitted within 30 days after the incorporation of the company. If you want to register your LLP you must submit a Limited Liability Partnership (LLP) agreement in the MCA portal. 

FAQ’S 

1. What is the structure of an LLP?

Limited Liability Partnership (LLP) is a corporate body and has a separate legal entity which has its own standing and is entirely separate from its partners. It also has a perpetual succession.

2. Whether foreigners can Incorporate LLP?

Yes, Under the LLP Act 2008 the foreign allows to incorporate an LLP in India, but your company should have a minimum one designated partner that is resident of India. 

3. Who can  become a partner of an LLP?

To become a partner of a LLP company you need to follow these eligibility criteria:- 

• Minimum of two partners required in an LLP.
• Corporate partners should be natural people.
• All partners must have Digital Signature Certificate (DSC)
• Companies should have unique names, not duplicate existing companies.
• Each company partner must agree to contribute capital.
• At least one partner of the company needs to be an Indian.
• Partner’s age should be 18 to 65.

4. Can an existing company be converted into LLP?

Yes, if you want to convert a company into a LLP then you need to fulfil the due legal requirements any existing private business or current unlisted public company registration may be changed into an LLP.

5. What is the objective of an LLP?

A limited liability partnership ( LLP) provides every member a limited amount of personal responsibility protection against the partnership’s firm obligations or liabilities.

6. Is GST compulsory for LLP?

LLPs might only need to register for GST if its revenue is at least the threshold for GST registration. Nonetheless, the LLP is required to register for GST and abide by all GST requirements if it supplies goods or services and its revenue surpasses the threshold.

7.What are the steps to incorporate LLP?

If you want to incorporate a LLP you need to follow these procedure:- 

Procedure for LLP Registration:

• Obtain DSCs for All Partners: Obtain Digital Signature Certificates for all partners.
• Select & Reserve LLP Name: Reserve a unique name using FiLLiP or RUN-LLP forms.
• Online Application for LLP Registration: File for LLP registration on the MCA website, submitting required documents.
• Apply for Certificate of Incorporation: Await approval and receive the Certificate of Incorporation.
• Submit LLP Agreement: Submit the LLP Agreement within 30 days of incorporation.

8.What are the advantages of LLP registration? 

These are the advantages of LLP registration:- 

• Separate Legal Entity: LLP enjoys a distinct legal identity.
• Limited Liability: Partners are liable only for their contributions, safeguarding personal assets.
• Low Cost and Low Compliance: Affordable formation with minimal compliance requirements.
• Perpetual Succession: The LLP continues even if a partner leaves or dies.
• Easy Management: Governed by the LLP Agreement, offering flexibility in management.
• Attracts Investors: Attractive to investors due to separate legal identity.