SRCC

Limited Liability Partnership

LLP Registration in India

LLP Registration in India has grown in popularity as an alternative company structure that combines the benefits of a corporation and the flexibility of a partnership firm into a single entity. The Limited Liability Partnership Act of 2008, which established the concept of LLP in India, was passed in 2008. This one-of-a-kind hybrid is ideal for small and medium-sized enterprises.

In India, managing and forming a Limited Liability Partnership is fairly simple. A minimum of two partners is necessary to form an LLP, but there is no upper limit. The Partners’ rights and responsibilities are outlined in the LLP agreement. In an LLP, one partner is not liable for the wrongdoings or carelessness of the other. The LLP agreement specifies that the partners are liable for all compliances and conditions.

In India, you'll need to fill out a checklist to form an LLP.
  • You’ll need at least two teammates.
  • For all approved partners, the Digital Signature Certificate is necessary.
  • All approved Partners will receive 3 DPINs.
  • The LLP’s name should not be confusingly similar to the name of another LLP or a registered trademark.
  • The LLP’s Partners make a financial contribution.
  • The Partners have agreed to form a Limited Liability Partnership (LLP).
  • 7 Proof of the LLP’s registered office.
How do you register your Limited Liability Partnership (LLP) with SRCC?

The entire procedure of registering an LLP in India with SRCC is quite simple. These ten steps must be followed.

  1. An engagement comes out to you when we receive your request, explains the procedure, and gathers the relevant papers.
  2. You may submit the papers using our SRCC website or mobile application.
  3. After the information is confirmed, the process of obtaining the applicant’s Digital Signature Certificate(DSC) begins.
  4. The applicant must complete the OTP Verification or the video KYC verification after receiving the DSC.
  5. The MCA receives a request for the LLP’s name to be reserved.
  6. Once the materials are received, the incorporation documents are prepared and submitted to the partners for signatures.
  7. The documents must be scanned and posted to the SRCC portal.
  8. The signed paperwork and application are then forwarded to the MCA for approval, which takes 2-5 working days.
  9. We also assist with the creation of a bank account in the LLP’s name, as well as the LLP Partnership Deed. This deed must be signed by all partners and stamped on stamp paper before being uploaded to SRCC within 25 days of incorporation.
  10. Within 30 days of incorporation, the engagement manager verifies the signed deed and uploads it to the MCA Portal.
Documents necessary to form a Limited Liability Partnership (LLP) in India

Concerning the Partners:

1)If the candidate is a foreigner, they must provide a PAN card or a passport.

2)Any government-issued identification card, such as a driver’s licence or an Aadhar card, a resident card or an electoral card, or any other kind of identification.

3)A bank statement or telephone bill that is less than three months old.

 

Registered office proof:

The landlord’s permission to use the premises as a registered office is documented by the name on the electricity or gas bills, the Property Tax receipt, or the sale title. This serves as a letter of authorization from the landlord, as well as proof of any utility services like as gas, electricity, or telephone, with the address of the premises and the owner’s name, or a document that is less than two months old.

Advantages of LLP registration in India

There are numerous reasons why people choose to form an LLP in SRCC rather than a private limited company. LLPs are seen to be a more straightforward and adaptable company structure. Entrepreneurs feel it possible to start their business since day-to-day operations are very simple. We’ll look at the many benefits of LLPs in this article.

Low registration costs: In India, the cost of forming an LLP is less than that of forming a public limited company or a private limited company. There is no requirement for a minimum contribution because an LLP can be created with the smallest amount of capital feasible.

There are no restrictions on business owners: A limited liability partnership (LLP) has a minimum of two members, but there is no limit to the number of partners. A private limited corporation, on the other hand, cannot have more than 200 members.

There is no necessity for a mandatory audit: All companies, whether public or private, regardless of their share capital, are required to have their accounts audited. However, there is no such need in the case of LLPs, which is regarded one of the main compliance benefits of creating an LLP. Only two types of audits are required of a limited liability corporation.

When an LLP’s contribution reaches Rs. 25 lakhs, or when an LLP’s annual turnover exceeds Rs. 40 lakhs.

Aspects of LLP taxation: The LLP is responsible for paying income tax, while the partner’s portion is exempt from taxation. As a result, there is no Dividend Distribution Tax (DDT) to pay.

Why would you choose an LLP over a partnership?

The major goal of LLP’s introduction in India is to create a type of business that limits the owners’ liability and is relatively straightforward to operate and hassle-free. It’s a different type of company than a partnership. We’ll look at the key distinctions between an LLP and a partnership firm in this article.

Cost Registration

Registration is free of charge.

Liability is limited.

In an LLP, the partners are not personally liable to creditors. As a result, the partners are only responsible to the extent of their LLP contributions. In a partnership business, on the other hand, the partners are personally liable to the creditors. As a result, entrepreneurs may claim that they are not partners in the partnership business. The partners in an LLP have little liability protection.

The number of partners: – In an LLP and a partnership firm must be at least two. An LLP, on the other hand, has no maximum restriction on the number of partners. If the number of partners in a partnership business falls below two for whatever reason, the partnership will be dissolved. LLPs, on the other hand, can recruit a new partner if the number of partners falls below two without officially dissolving the LLP.

Central vs State Government

As it is registered with the Ministry of Corporate Affairs of India, an LLP can change its registered office and create a bank account anywhere in India.

The state government controls the Registrar of Businesses, which registers partnership firms. As a result, operating or moving across India with Partnership businesses is more difficult.

Perpetual Existence

The long-term viability of LLP is not contingent on its partners. The LLP’s partners may change from time to time, but this will have no effect on the LLP’s existence, continuation, or activities.

The resignation or death of any partner in a Partnership company would have major ramifications, and the Partnership would have to be recreated.

Membership

Members can be added to an LLP before or after it is formed. In an LLP, the following people can be partners:

  • Limited-liability partnership for individuals
  • Companies
  • Limited Liability Partnership in a Foreign Country
  • Agreement with Foreign Corporations
  • The LLP agreement must be signed and submitted within 30 days of the LLP’s formation. If the LLP fails to file the agreement, the relationship between the Partners and the LLP shall be governed by the First Schedule of the LLP Act.

If there is no formal agreement and no specific statement on any of the topics dealt with in the first schedule, the first schedule will manage those things.

What distinguishes an LLP from a Private Limited Company?

Because both a Private Limited Company and an LLP provide similar benefits, entrepreneurs establishing a new firm are usually inquisitive about the differences. From the standpoint of an entrepreneur looking to start a new firm, here’s how a Private Limited Company and an LLP compare.

Registration process: The methods for forming a Private Limited Company and a Limited Liability Partnership (LLP) are substantially similar, with minor changes in the paperwork and forms that must be completed for incorporation.

The processes for forming a Private Limited Company and a Limited Liability Partnership (LLP) are outlined below.

 

  • Obtaining the suggested Directors’ digital signature certifications (DSC)
  • Obtaining the prospective Directors’ Director Identification Numbers (DINs)
  • Obtaining the MCA’s permission for the name.
  • Incorporation paperwork is being completed.
  • The Ministry of Corporate Affairs, which is part of the Central Government, registers both LLPs and private limited corporations. Incorporation of both private and public limited businesses takes about 15-20 working days to complete.

Cost of Registration: Because LLPs were created to serve the requirements of small companies, the incorporation charge for an LLP is less than that of a Private Limited Company. In comparison to Private Limited Company Registration, LLP registration requires a smaller number of papers to be printed on Non-Judicial Stamp paper. A Private Company may be formed online for Rs.6899 with SRCC

Features: The LLP and the Private Limited Company both have similar qualities. Because they are independent legal entities, they have assets and liabilities that are distinct from the promoters. Although both LLP and Private Limited businesses are transferable, a Private Limited Company provides more freedom in terms of transferring or even sharing ownership. Private Limited Company and LLP have a perpetual life unless they are closed by the promoters or a competent authority.

Ownership: In an LLP, the partners own the company and have the authority to govern and control it. As a result, a Partner in an LLP will play a critical function, as he will serve as both an owner and a manager. A Private Limited Company, on the other hand, provides flexibility to the promoters in terms of ownership and ownership sharing.

Tax Compliance: The tax compliance requirements for an LLP and a Private Limited Company are identical. When it comes to Ministry of Corporate Affairs compliance, LLPs have a number of advantages. If the LLP’s annual turnover is less than Rs. 40 lakh and the capital contribution are less than Rs. 25 lakh, the LLP’s account does not need to be audited. An LLP, on the other hand, would be required to file LLP Forms 8 and 11. A Private Limited Company, on the other hand, would be required to file an annual return with the Ministry of Corporate Affairs.

LLP Post-Incorporation Compliance

The following are the annual compliances that an LLP must adhere to.

Income tax return: LLPs must file an income tax return using form ITR 5. The chosen partner’s digital signatures can be used to file Form ITR 5 online through the income tax website.

MCA annual return: Each year, the LLP Form 11 is due on or before the 30th of May. The number of partners, total number of partners, total contribution received by all partners, information of body corporate as partners, and a summary of the partners are all listed on Form 11. Along with this Form 8, you must also file Form 8 within 30 days of the end of the relevant financial year’s first six months, along with the required costs. As a result, each financial year’s LLP Form 8 must be filed by the 30th of October.

Advantages of LLP registration in India

There are numerous reasons why people choose to form an LLP in SRCC rather than a private limited company. LLPs are seen to be a more straightforward and adaptable company structure. Entrepreneurs feel it possible to start their business since day-to-day operations are very simple. We’ll look at the many benefits of LLPs in this article.

Low registration costs: In India, the cost of forming an LLP is less than that of forming a public limited company or a private limited company. There is no requirement for a minimum contribution because an LLP can be created with the smallest amount of capital feasible.

There are no restrictions on business owners: A limited liability partnership (LLP) has a minimum of two members, but there is no limit to the number of partners. A private limited corporation, on the other hand, cannot have more than 200 members.

There is no necessity for a mandatory audit: All companies, whether public or private, regardless of their share capital, are required to have their accounts audited. However, there is no such need in the case of LLPs, which is regarded one of the main compliance benefits of creating an LLP. Only two types of audits are required of a limited liability corporation.

When an LLP’s contribution reaches Rs. 25 lakhs, or when an LLP’s annual turnover exceeds Rs. 40 lakhs.

Aspects of LLP taxation: The LLP is responsible for paying income tax, while the partner’s portion is exempt from taxation. As a result, there is no Dividend Distribution Tax (DDT) to pay.

LLP Foreign Ownership

Following revisions to the FDI rule on November 10th, 2015, 100 percent FDI is now allowed through the automatic method. There are no FDI-linked performance criteria and 100 percent FDI is authorised in industries and activities where 100 percent FDI is allowed. As a result, foreign nationals can now establish or invest in a limited liability partnership (LLP).

Prior to 2015, government clearance was necessary for NRIs and foreign citizens to engage in LLP. As a result, the procedure of forming an LLP for NRIs and foreign nationals was time-consuming and costly. As a result, NRIs and foreign nationals preferred LLP registrations to company registrations. However, with the easing of FDI regulations, NRIs and foreign nationals can now readily register their limited liability partnerships (LLPs).

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