Limited Liability Partnership (LLP)

Limited Liability Partnership has become the standard style of business; many entrepreneurs and start-ups are opting for this. It works as a substitute corporate business that gives the benefits of limited liability of a company and the flexibility of a partnership.

The Limited liability Partnership Act was introduced in 2008, which regulates the LLP in India. The Limited Liability Partnership Act, 2008 was approved by the Parliament of India to introduce and lawful sanction the notion of LLP in India.

Minimum two designated partners are required in LLP, and at least one of them should hold a resident in India, as there is no upper limit on the maximum number of partners. The LLP agreement distributes the rights and duties of designated partners.

Features of limited liability partnership (llp):

Benefits of Company Registration

• The price for the formation of LLP is low.
• For all legal purposes, LLP is a synthetic legal person. A legal method that creates it and has all the rights of an individual.
• Unlike a general partnership firm, a limited liability partnership can continue its existence even after the retirement, insolvency, or even death of one or more partners.
• An agreement formed between all partners governs the rights and duties of all the partners.
• LLP contains elements of both 'a corporate structure' and a partnership firm structure 'that's why it is called a hybrid between a company and a partnership.
• The power to investigate what's happening with an LLP resides in the hands of the Central Government.

Advantages

Advantages of LLP

• LLP has a separate legal entity: The LLP is distinct from its partners. It is an independent legal body that is entirely responsible for its assets. An LLP enjoys extreme freedom in the matter of conducting it's business and operation.
• Limited liability of partner: The partners in LLP have liability. The liability of every partner is parscribed to the contribution created by the partner. There's no liability on a partner's assets that provides freedom and adaptability to the organization.
• Low price and fewer compliance : The cost of forming an LLP is low, so it is necessary to file only two statements annually that are Annual Return and a Statement of Accounts and Solvency.
  • Expansion of activities is straightforward because there is no restriction on the maximum number of partners.
  • LLPs do not need to remit traditional taxes, such as corporate tax or wealth tax, required of other companies.
  • Partners earning income through the LLP must settle their tax obligations individually.

Disadvantages

Disadvantages of LLP

• Penalty on non-compliance: The compliance that is to be followed by LLP is less, but if these compliances are not completed on time, then the LLP will have to pay a heavy penalty on it.
• Winding up and dissolution of LLP: Minimum 2 partners are required for LLP, and if it's below two for six months, then the LLP will be dissolved. Also, LLP will be dissolved if the LLP is unable to pay its debts.
• Difficulty in raising capital : The LLP doesn't follow the concept of equity or shareholders like a company. Angel investors and venture capitalists cannot invest in the LLP as shareholders because the shareholders must be partners in the LLP and have to take up all the partner's responsibilities. Therefore, angel investors and venture capitalists prefer to invest in a company.
  • Ownership rights are transferable only with the consent of all the partners of the LLP.
  • An LLP must have at least two members. If any one of them leave, then LLP must be dissolved.

Documents Requirement

What are the documents you have to submit for LLP Registration online?

Documents of Partners

1. ID Proof of the Partners (PAN Card)
2. Address Proof of the partners (Voter ID/Aadhar Card/Driving License)
3. Passport (in case of Foreign Nationals/ NRIs)
4. 2 Photographs of each Partner
5. limited liability company Proof of Registered Office Address (Electricity Bill/Telephone Bill/Bank Statement)
6. Digital Signature Partners

How It's Done

Duration: The duration for the whole process will be minimum 15 days.

• LLP Registration in India Complete our Query Form
• Limited liability partnership LLP name availability search
• Limited liability company Documents submission
• Llp registration fees Filing of application with MCA
• Limited liability partnership registration Obtain Incorporation certificate within a week

LLP Registration in India

Documents to be submitted ?

1. llp registration online ID Proof (PAN Card)
2. limited liability partnership Address Proof 1(Voter ID/Passport/Driving License)
3. llp registration services Address Proof 2(Electricity Bill/Telephone Bill/Bank Statement)
4. limited liability partnership registration Aadhar Card
5. LLP Registration in India 2 Photographs of each partners