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Limited Liability Partnership (LLP) combines the benefits of a partnership with that of a limited liability company. In India, it took shape after January 2009 and was an instant success with startups and professional services. The idea behind LLP was to provide a form of business that is easy to maintain and benefit owners with limited liability.
Here are four major reasons why people tend to choose LLP as their business model:
The members of an LLP are only liable for a small amount of debt incurred by the firm. In case of bankruptcy, the personal assets of the partners will not be taken into account. On the other hand, for proprietorships and partnerships, the personal assets of directors and partners will be seized if the business goes bankrupt.
An LLP is a separate legal entity from the partners in it. It has an uninterrupted existence that follows perpetual succession, i.e., the partners might leave, but the business remains. The terms of dissolution have to be mutually agreed upon for the firm to dissolve.
Transferring the ownership of an LLP is also simple. A person can easily be inducted as designated partner in LLP and the ownership is transferred to them.
LLPs having a capital amount less than ₹25 lakhs and turnover below ₹40 lakhs per year do not require any formal audits. This makes registering as an LLP beneficial for small businesses and startups.
To be eligible for LLP company registration in india, one should meet the following criteria:
The following LLP registration requirements has to submitted while registering the firm
The partners has to provide the following documents:
Note: One partner must self-attest the first three documents. In the case of foreign nationals or NRIs, all the documents must be notarised (if currently in India or a non-commonwealth country) or apostilled (if from a commonwealth country).
For the registered office:
You can register LLP online through HSRAdvisory. While we make LLP registration a simple 3-step process for you, the actual registration process is elaborate and is explained below for your knowledge:
All the forms that need to be submitted online require the directors’ DSC. So, the first step in the process is to get DSCs and DINs for 2 partners. We collect the necessary information from you and file it on your behalf.
Simultaneously, we check if the name you want to register under is available and reserve it for your LLP. You can check for name availability in the MCA portal.
The approval of the name will be made by the registrar only if the central government does not deem it undesirable. The name should not hold any resemblance to any of the existing partnership firms, LLPs, trademarks, or body corporates.
The next step is to draft the LLP agreement and other documents for registration. An LLP agreement is very crucial in a limited liability partnership as it determines the mutual rights and duties amongst the partners, and between the LLP and the partners. Thus, our experts take utmost care in drafting this agreement.
The partners enter into the LLP agreement upon registering the LLP by filing Form 3 online on the MCA portal. This procedure has to be done within 30 days of the date of incorporation.
Our team will file the necessary forms and documents with the registrar. Once the registrar approves all the forms and documents, you get your LLP incorporation certificate and are almost set for running your business.
As soon as you get the incorporation certificate, we will apply for the PAN, TAN, and bank account for your LLP.
The following are included in HSRAdvisory’s LLP Registration in India package:
We also assist with the following to register a LLP company in india:
The time taken to register a limited liability partnership India depends on receiving the required paperwork and verifying that all applicable LLP Act provisions have been followed. The Registrar will register the LLP, at most 14 days after Form-2 is filed, and issue a certificate of incorporation in Form-16.
The key features of a Limited Liability Partnership (LLP) are:
As required by the LLP Act of 2008, an LLP has a remarkably low number of compliances as compared to businesses. To foster transparency, good governance, and to safeguard the interests of all stakeholders, including ROC, Partners, Designated Partners, Investors, and Tax Departments, meeting these compliances is not only necessary but also mandated. These compliances can be broken down into four groups: one-time post-incorporation, yearly, event-based, and recurring compliances. Here, we’ll talk about the LLP’s yearly and one-time compliances; for more information about the other requirements, get in touch with one of our knowledgeable startup advisors.
In contrast to a corporation, a limited liability partnership only needs to comply with one requirement right away, which is the submission of the LLP Agreement to the ROC.
The LLP Agreement, which contains all the terms and conditions that its partners have voluntarily agreed upon, is the LLP’s governing instrument. All of the LLP’s partners have signed the document, which is written on Stamp paper and then stamped and notarized by a public notary. The ROC is not needed to receive the Agreement at the time of incorporation. However, the LLP Agreement needs to be submitted to the ROC in e-Form 3 within 30 days of the date of incorporation.
An LLP must submit annual returns to the ROC, income tax returns to the IT Department, financial statements, and statements of solvency to the ROC as part of its annual compliance obligations every fiscal year.
| Compliance Requirement | Due Date |
|---|---|
| ROC Annual Returns (Form 11) | The Annual Returns of a particular year will be filed on or before 30 May of the next financial year. If the annual turnover of the LLP crosses ₹5 crores or the capital contribution crosses ₹50 lakhs in a financial year, the returns for that year must be certified by a practising Company Secretary. |
| Financial Statements (Form 8) | The Financial Statements of a particular year will be filed on or before 30 October of the next financial year. The financial statements will have to be audited by a practising Chartered Accountant only for financial years in which the annual turnover exceeds ₹40 lakhs or the capital contribution exceeds ₹25 lakhs. |
| Statement of Solvency (Form 8) | The Statement of Solvency of a particular year will be filed on or before 30 October of the next financial year |
| Income Tax Returns | The Income Tax Returns of a particular year will be filed on or before 31 July of the next financial year if tax audit is not applicable. If tax audit is applicable, then ITR would be filed on or before 30 September |
The LLP Amendment Act 2021 was introduced in the Indian parliament and came into effect on 3rd June 2021. The key changes introduced by the amendment act are:
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Answered by our experts
Yes, Regardless of the products or services they provide, Limited Liability Partnerships (LLPs) must pay Goods and Services Tax (GST). LLPs need to register for GST and submit GST returns on a regular basis.
Regarding the relationship between the various partners in the LLP, an LLP agreement is made between the partners and the LLP. An LLP agreement typically includes management guidelines, provisions for adding new partners, methods for formulating policy, etc.
An LLP must be established with at least two designated partners, as per the LLP Act. The designated partners are in charge of completing all requirements necessary to establish and maintain an LLP.
You can reach out to HSRAdvisory to complete the process, we can register your LLP within just a few minutes. Make sure to resolve all your queries with our expert team.
Typically, only start-ups that will not be looking for venture capital funding register LLPs. This is because venture capitalists only invest in private and public limited companies.
Yes, running an LLP is significantly less expensive than running a private limited company, especially in the beginning. This is so because many compliances, like an audit, only apply to LLPs once they have a sizable turnover. In their first year, LLPs typically spend half as much on registrations and compliance tasks as a private limited company does.