Limited Liability Partnership (LLP)
In the business world, the term “LLP” refers to Limited Liability Partnerships (LLPs), which differ from Private Limited Companies and General Partnerships in terms of liability, protection, and expense. LLPs are registered in India.
An overview of online LLP registration in India
A well-known and often used corporate structure is LLP Registration. LLP and Private Limited corporations are both registered with the Central Government’s Ministry of Corporate Affairs. Register your LLP and complete the LLP registration process with Makemysales.
One of the most popular types of businesses for entrepreneurs is the limited liability partnership, or LLP. LLPs are the simplest type of business organisation due to the benefit of restricted liability. Limited Liability Partnership registration in India allows partners complete freedom to create a partnership business structure in which each member’s or partner’s liability is constrained to the amount of capital they contribute to the enterprise. To be clear, in this corporate form, if the partnership fails, creditors or investors cannot seize the partner’s personal belongings, property, or income.
What is an Indian LLP registration, or limited liability partnership firm?
Compared to a partnership firm, a limited liability partnership, or LLP, is a corporate structure with more added benefits. This form offers partnership company responsibility to its partners at a very low adherence cost. Additionally, the Partners of the online India LLP registration can create an internal corporate structure that is comparable to a partnership firm.
In India, LLP registration is also regarded as a separate legal entity from its members because it has the authority to transfer all of its assets while restricting the liability of its partners. A Limited Liability Partnership, or LLP, is thus a cross between a corporation and a partnership firm.
Benefits of India Limited Liability Partnership Registration
Limited liability:
In an LLP, or Limited responsibility Partnership, each partner’s responsibility is capped at the amount of his or her investment in the business. This is the most crucial aspect of an LLP since it protects all of the members’ personal assets and eliminates the need to cover any losses or debt incurred by the company. Additionally, it is not appropriate to hold the innocent partners accountable for this and accuse them of the same whether the LLP or Limited Liability Partnership entity itself does a wrongdoing or when another partner performs a wrongdoing. It is crucial to note that each partner’s liability will be restricted to their individual contributions.
Separate legal entity:
An LLP benefits from having its own legal status as a separate entity. This essentially means that the organisation designated as an LLP is permitted to own assets under its own name. Additionally, it has the right to sue and is likewise sueable. In addition, as mentioned in the previous paragraph, each partner’s liability shall be restricted to his or her proportionate share, shielding that partner from any costs attributable to the negligence or misconduct of the other partners.
Flexible agreement:
In an LLP, the partners are free and have the discretion to draught the LLP agreement in accordance with the Act, RoC, or MCA. The LLP registration firm’s partners are free to create and design the contract as they see fit. However, it must appropriately take into account and respect the laws, rules, and obligations.
No manager/owner distinction:
The most straightforward and easily adopted legal structure is a Limited Liability Partnership company. In an LLP, or limited liability partnership, the partners are those who manage and govern the business in addition to owning it. An LLP differs from a private limited company in that its directors and shareholders may not be the same people. Considering this to be a fair point, we can see that venture capitalists and angel investors do not offer loans, invest in, or fund companies that are registered as LLP’s.
Less compliance needed:
When compared to a private limited company, a limited liability partnership firm is a less complicated, inexpensive, simple, and lower budgeted business that can also be operated effectively. This is primarily due to the fact that three compliances must be made annually. However, a private limited corporation must maintain several compliances and do regular audits in order to comply with the provision.
Simple to wind up:
In contrast to a private limited company, a limited liability partnership is not only simpler to establish but also simpler to dissolve. The winding-up procedure typically takes two to three months to complete, whereas closing a private limited company may take longer than a year.
Features of Limited Liability Partnership registration in India
1) It is regarded as a distinct legal entity, much like other businesses
2) One key advantage or feature of an LLP or Limited responsibility Partnership that the partner can take advantage of is that his or her responsibility will be restricted to the amount of contribution that they have made to the business or partnership firm.
3) Less adherence
4) No requirement for a minimum capital investment
5) Starting an LLP is inexpensive.
6)An LLP must have a minimum of two partners to be incorporated. The maximum number of partners that may be admitted is unrestricted.
7)At least two of the selected partners must be people, with at least one of them having a residence in India.
8) The LLP partnership agreement governs or controls the rights, obligations, and liabilities of partners who are the entity’s authorised partners. They are the ones in charge of ensuring that all rules outlined in the LLP agreement and the Limited Liability Partnership Act of 2008 are followed.
9)Importantly, you must register your company under the LLP Act of 2008 in order to launch it as a Limited Liability Partnership firm.
Registration procedure of Limited Liability Partnership Firm in India
An easy to follow step-by-step approach is provided below to help you register an LLP in India:
Step 1:
You must apply for the DSC, or digital signature certificate, of the authorised partners of the LLP before the registration process may begin.
Step 2:
All designated partners, or any partners who want to be designated partners of the LLP, must file an application for a Director Identification Number, or DIN.
Step 3:
For the prospective LLP’s name reservation, which will be handled by the Central Registration Centre under Non-STP, a form known as the LLP-RUN or LLP-Reserve Unique Name is filed. However, it is always advisable to check the MCA portal to see if the suggested or proposed name is already being used by another current company before submitting it.
Step 4: This stage is where the LLP is incorporated.
       1) The LLP incorporation form must be filed with the Registrar of the state where the LLP’s registered office is situated, along with all necessary supporting documentation.
        2) LLP registration fees must be paid in accordance with Annexure ‘A’.
        3) The entity can use this form to apply for the DPIN allotment if the individual who is to be nominated as a designated partner does not            have a DIN or DPIN.
        4) Only two people should submit the application for allocation.
        5) You can use FiLLiP to apply for the reservation as well.
        6)The authorised name may be used by entering it as the proposed name of the LLP or limited liability partnership firm in the registration           form after getting approval for the proposed name.
Step 5:
You have now completed the process and the Limited Liability Partnership Agreement has been filed. The main foundation or agreement that would help the LLP is the LLP Agreement. This is due to the fact that it would also control the LLP’s and its partners’ shared rights and obligations.
| Form Name | Form Purpose | |
|---|---|---|
| RUN – LLP | Form for reserving a name for the Limited Liability Partnership | |
| *FiLLiP | Form for incorporation of Limited Liability Partnership | |
| Form 5 | Notice for change of name | |
| Form 17 | Application to convert a firm into Limited Liability Partnership | |
| Form 18 | Application to convert a private company or public company into LLP | |
| Forms | Estimated Fees structure | |
| LLP | Depending on the capital contribution: | |
| Incorporation | 1. Rs.500 - for the contribution of money up to Rs 1 lakh 2. Rs. 2000 - for the contribution of money up to Rs 1 Lakh to Rs 5 lakh | |
| LLP Agreement | Depending on the capital contribution and stamp duty charges of the state where you register LLP. |