Description
LLP Registration in India
LLP Registration in India has become an easy alternative form of business that provides the advantages of a Company and the flexibility and benefits of a Partnership firm into a single organization. The Concept of LLP in India was introduced back in 2008 by the Limited Liability Partnership Act of 2008. This unique hybrid is suitable for setting small, medium-sized businesses.
It is very simple to manage and incorporate a Limited Liability Partnership in India. To register an LLP minimum of two partners are required, there is no upper limit as such. The LLP agreement states the rights and the duties of the Partners. In an LLP one partner is not responsible for the misconduct and negligence of the other partner. The partners are responsible for the compliances and all the provisions that are specified in the LLP agreement.
Checklist for registering an LLP in India
For incorporating an LLP in India:
- A minimum of two partners are required.
- The Digital Signature Certificate is required for all designated partners.
- DPIN for all designated Partners. If they already have a DIN that can also be used.
- The name of the LLP should be such that it is not similar to the name of any existing LLP or Trademark registration.
- Capital contribution by the Partners of the LLP.
- LLP Agreement between the Partners.
- Proof of registered office of the LLP.
How to register your LLP with Taxology?
The whole process to get an LLP registered in India with Taxology is very simple. You need to follow these steps.
- Once we receive your request an expert from our start up team reaches you, explains the whole process, and collects the necessary documents.
- The documents can be submitted online through our Taxology website or shared via email or whatspp.
- The received information is then verified and the process to obtain the Digital Signature Certificateof the applicant begins.
- Once the DSC is the applicant has to complete the OTP Verification or the video KYC check.
- A request is filed with the MCA for reserving the name of the LLP.
- On receiving the documents, the incorporation documents are drafted and sent to the partners for signatures.
- A scanned copy of the documents is to be shared with our start up team.
- The signed documents along with the application are then sent for approval to the MCA which takes around 2-5 working days.
- We also help in obtaining PAN & GST registration in the name of the LLP, in parallel to this we draft the LLP Partnership deed. This deed is signed by all the partners and on a stamp paper which has to be then shared with our start up team within 25 days of Incorporation.
- The Signed deed is then verified by the expert and uploaded on the MCA Portal within 30 days of incorporation.
Documents required to register an LLP in India
For registering an LLP in India following documents are required. We at Taxology carry on LLP registration with just a nominal fee of Rs.6999.
For the Partners:
- PAN card or Passport if the applicant is a foreigner.
- Drivers license or Aadhar card, resident card or election card, or any other identity proof issued by the government.
- Less than 3-month-old bank statement or telephone bill.
Registered office proof:
- The authorization from the landlord (Name mentioned in the Electricity bill or Gas bills or Property Tax receipt or sale deed) to use the premises as a registered office. This acts as a NOC from the landlord and;
- Proof of evidence of any utility services like gas, electricity, telephone depicting the address of the premises bearing the name of the owner or document, which is not old than two months.
Advantages of LLP registration in India
There are several reasons why people opt for LLP registration in India over Private Limited Company incorporation. LLPs are considered to be easier to set up and flexible form of business. Entrepreneurs find it feasible to start their organization as it is comparatively hassle-free in day-to-day operations. Here, we take a look at the various advantages of LLPs.
Low registration cost: The cost of registering an LLP in India is comparatively lower than that of incorporating a public limited company or a private limited company. You can register an LLP here through Taxology at just 6999.
No requirement for minimum contribution: As an LLP can be formed with the least possible capital, there is no minimum capital requirement in the incorporation of an LLP.
No limits on the owners of the business: An LLP requires a minimum of 2 partners but there is no such upper limit on the maximum number of partners. Whereas in a private limited company there are restrictions on having more than 200 members.
No requirement of compulsory audit: Whether the company is Public or Private irrespective of their share capital is expected to get its account audited. But here in the case of LLPs, there is no such mandatory requirement and this is considered to be one of the significant compliance benefits of forming an LLP. A Limited liability company is supposed to get its audit done only in two cases.
- When the contribution of LLPs exceeds over Rs. 25 lakhs.
- or
- When the annual turnover of LLPs exceeds over Rs. 40 lakhs.
Taxation aspect on LLP: LLP is liable for payment of income tax and the share of the partner is not liable to taxation. Thus, no Dividend Distribution Tax (DDT) is payable. Know more
Why prefer LLP over Partnership?
The main purpose of introducing LLP in India is to introduce a form of business that provides limited liability to the owners and is comparatively easy to manage and hassle-free. It is an alternative to Partnership firms. Here, we take a look at the major differences between an LLP and a partnership firm.
Cost registration
Limited liability
The number of partners
LLP and partnership firms both must have a minimum of 2 partners. However, there is no upper limit in the number of partners in an LLP. Just in case if the number of partners reduces below 2 in a partnership firm due for any reason the firm would stand dissolved. Whereas in the case of LLPs if the number of partners reduces below 2, the sole partner can find a new partner without actually dissolving the LLP.
Central vs State Government
An LLP can shift its registered office and open a bank account anywhere in India as it is registered under the Ministry of Corporate Affairs of India.
The Registrar of firms that registers the partnership firms is controlled by the state government. Hence, it is more tedious to operate or move across India with Partnership firms.
Perpetual existence
The subsistence of LLP does not depend on its partners. The partners of the LLP can change from time to time, but that will not affect the existence, continuity, or operations of the LLP.
In the case of a Partnership firm, the resignation or death of any partner would have huge consequences and the Partnership would have to be reconstituted.
Membership
Members can be added to LLP during incorporation or post incorporation. The following persons can be partners in LLP:
- Individuals
- Limited liability partnership
- Companies
- Foreign Limited Liability partnership
- Foreign Companies
- Agreement
The LLP agreement must be executed and filed within 30 days of incorporation of an LLP. If the LLP fails to file the agreement, then there is no agreement and the First Schedule of the LLP Act will administrate the relationship between the Partners and LLP.
In case there is written agreement and no detailed declaration about any of the matters dealt with in the first schedule, such matters will be administered by the first schedule.
What makes an LLP different from a Private Limited Company?
Entrepreneurs starting a new business are always curious to know the difference between a Private Limited Company and an LLP, as both of them offer similar features. Here’s the comparison between a Private Limited Company and an LLP from an entrepreneur’s perspective for starting a new business.
Registration process: The processes for Private Limited Company registration and LLP Registration are very similar with some differences in the documents and the forms that are filed for incorporation.
Following are the steps involved for the incorporation of a Private Limited Company as well as an LLP.
- Obtaining the Digital signature certificates (DSC)for the proposed Directors
- Obtaining the Director identification number (DIN) for the proposed Directors
- Obtaining the approval of the name from the MCA.
- Filing for incorporation.
- Both LLP and Private Limited companies are registered with the Ministry of Corporate affairs under Central Government. The processing time for incorporation of both Private and public limited companies takes around 15-20 working days.
Cost of Registration: The LLPs have been designed to meet the needs of small businesses and hence, the incorporation fee for an LLP is comparatively cheaper than that of a Private Limited Company. LLP registration requires a lesser number of documents that need to be printed on Non-Judicial stamp paper as compared to the Private Limited Company Registration. Through Taxology a Private Company can be registered at just Rs.6999.
Features: Similar features are offered by LLP and Private Limited Company. Both being separate legal entities have assets and liabilities that are separate from that of the promoters. Even though both LLP and Private Limited companies are transferrable, a Private Limited Company offers more flexibility when it comes to transferring or even sharing ownerships. Unless closed by the promoters or by a competent authority both Private Limited Company and LLP have a perennial life.
Ownership: In LLP the partners hold the ownership as well as the powers to manage and control the LLP. Therefore, a Partner in LLP will play a very significant role as he will play the role of both owners as well as a manager. In parallel, flexibility is offered to the promoters by a Private Limited Company when it comes to ownership and ownership sharing.
Compliance: For LLP and Private Limited Company the Tax Compliances are similar. LLPs enjoy several advantages when it comes to Compliances relevant to the Ministry of Corporate affairs. An LLP doesn’t need to have its account audited if the annual turnover of the LLP is less than Rs. 40 lakh and the capital contribution doesn’t exceed Rs. 25 lakh. An LLP would however have to file LLP Form 8 and LLP form 11. On the contrary, a Private Limited Company would have to file an annual return with the Ministry of Corporate Affairs each year.
Post-Incorporation Compliances of LLPs
Along with the incorporation of LLP, we at Taxology help you to maintain the basic accounting and Compliance of your LLP at a very affordable price. The package starts from Rs.6999 per year. Following are the compliances that an LLP must follow every year.
Income tax return: Income tax return using form ITR 5 must be filed by the LLPs. Form ITR 5 can be filed online through the income tax website using the digital signatures of the designated partner.
MCA annual return: The LLP Form 11 should is due on or before the 30th of May each year. Form 11 contains the details of the number of partners, total number of partners, total contribution received by all partners, details of body corporate as partners, and summary of the partners. Along with this Form, 8 must be filed within 30 days from the end of the 6 months of the respective financial year along with some prescribed fees. Hence, LLP form 8 must be filed before the 30th of October of each financial year.
In addition to this, GST registration, GST return filing, and TDS return filing would be required for the LLP based on the sales and turnover.
Taxology is one of the most efficient in LLP registration services in India, also offers a variety of business registration services like Private Company Limited registration, One Person Company registration, Nidhi Company Registration, Section 8 Company Registration, Producer Company registration, and Indian Company registration.
How to convert a Partnership firm into an LLP?
Registering Partnership firms do have certain drawbacks as compared to the newly introduced Limited Liability Partnerships. As the Partnership firms do not provide Limited Liability Protection for the Partners.
In the recent past, LLPs have become a prime choice for small and medium-sized business firms.
Let us take a look at the process of converting a Partnership firm into an LLP.
To commence the Partnership conversion into an LLP, Digital Signature Certificate and DPIN OR Director Identification Number (DIN) must first be obtained for all the Partners.
Following documents are required along with Form 17 :
- Consent of Partners for conversion into an LLP
- Incorporation Documents for LLP
- NOC from Tax Authorities
- Financial Statements of the Partnership firm
- List of all creditors along with their consent
- Any other document or information as requested by the authorities.
Once the mentioned documents are submitted to the Registrar after the verification, a certificate of Registration for LLP is issued.
The LLP must then inform the concerned Registrar of firms about converting a Partnership into an LLP within 15 days from the date of conversion through the prescribed forms.
What is the procedure to transfer the license and Registration?
The Licenses, approvals, permits, or registrations will not be directly transferred into an LLP. Also, suppose there are any properties registered under the Partnership firm before the conversion. In that case, the LLP must approach the concerned authorities and initiate the laid down procedure for the transfer of assets.
Hence, before converting a Partnership firm into an LLP, the Partner must clarify all the aspects.
After the conversion into an LLP, the Partnership stands dissolved, and the name of the Partnership firm is removed from the register of the Registrar of Firms. The Partnership firm is considered wholly transferred into an LLP, and the conversion does not affect any existing contracts, employments, agreement, etc.
The Partners will now enjoy Limited Liability Protection for all transactions conducted after the conversion of Partnership into an LLP. The Partners will continue to be personally liable for all the business operated as a Partnership before conversion.
Post conversion into an LLP, the newly formed LLP must include a statement that it was converted from a Partnership into an LLP in all official correspondence for not less than 12 months from the date of conversion.
To convert a Partnership firm into an LLP, visit the Taxology website.
We aim to help the entrepreneur with the legal and regulatory requirements and guide the individual throughout the business life cycle, offering support and guidance at every stage.
Our business consultants will help you choose the right kind of entity and guide you with the maintenance of the post-incorporation Compliances.
LLP Registration Plans
All Inclusive Pricing – No Hidden Fee
- LLP deed drafting
- LLP registration
- Digital signature
- 2 Director Identification Numbers
- PAN, TAN, GST registration
- Bank account opening
- Inclusive of all government fees and taxes
- Stamp paper and Notary will be in the client's scope
- LLP deed drafting
- LLP registration
- Digital signature
- 2 Director Identification Numbers
- PAN, TAN, GST registration
- Bank account opening
- 1 year accounting
- Financial statements preparation
- Form 8 filing
- Form 11
- Income tax return filing
- LLP deed drafting
- LLP registration
- Digital signature
- 2 Director Identification Numbers
- PAN, TAN, GST registration
- Bank account opening
- 1 year accounting
- Financial statements preparation
- Form 8 filing
- Form 11
- Income tax return filing
- Trademark filing
General questions
A Limited Liability Partnership must have a minimum of two Partners and an LLP can have any number of Partners.
An LLP can be started with any amount of money there is no such minimum requirement. A partner may contribute both tangible or intangible property.
Designated Partner Identification Number is a unique identification number that is assigned to all existing and proposed Designated Partner of an LLP. All the present or proposed Directors must have a DPIN.
The time taken for incorporation depends on the submission of relevant documents by the client as well as the Approvals from the Government authorities. Taxology can help you Incorporate an LLP in 14-20 working days.
An existing partnership firm or a Company that is unlisted can be converted into an LLP. This conversion into an LLP brings in many benefits.
- An LLP is supposed to file
- LLP Annual return by Filing Form 11.
- Final Statement of Account and Solvency
- Income Tax Return
LLP Registration is the registration of an entity that provides the advantages of a Company and the flexibility of a Partnership firm in a Single organization.
There are various reasons why one should incorporate an LLP.
- The registration cost is low.
- No requrement for minimum contributuion.
- No limits on the owners of the business.
- It is not necessary to carry audit.
- There are fewer tax compliances
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