Limited Liability Partnership (LLP) Registration

The LLP gives a company the profit of both the features of the Limited Liability and that of a partnership. However here are few of the other benefits of the LLP:

• The LLP can enter into contracts and can hold property in its own name. Thus, a LLP does not dissolve even with the change of partners.
• LLP being the separate legal entity is liable to the assets whereas the liability of the partners is limited to their contribution in the company.
• No partner is liable for any un- authorized action or independent decision taken by other partners. The LLP shields every partner from the liability created by the wrongful decision of some other partner.
• The rights and duties of the partners are set on the agreed upon terms between the partners or the LLP and the partners. However, LLP is not relieved of the liability for its obligations as a separate identity.

Thus, the features of both corporate and partnership makes it a hybrid of the two.

A minimum number of 2 partners are needed to formation of a LLP. There is no Maximum number ceiling of partners.

The structure of LLP:

It is a corporate body and has a separate legal entity. The succession in a LLP is a perpetual one.

Advantages of the LLP:

• Agreement is the basis of the operation and organisation of a LLP.
• Detailed legal and procedural requirements are not made the basis of flexibility. Thus, provides flexibility.
• It enables professional and technical expertise. It also initiates to combine the financial risk taking capacity in an efficient manner.

The other countries where LLP is available:

• On the basis of the study by the experts, LLP Act is believed to be based on both the UK LLP Act 2000 and the Singapore LLP Act 2005. However LLP form of business is practised throughout the world in countries like UK, US, Singapore, Australia and the Gulf countries.

The difference between the LLP and the Traditional partnership firm:

• In the traditional partnership firm the partner is liable for all the activities carried out by the other partners.
• No partner is liable for any un- authorized action or independent decision taken by other partners. The LLP shields every partner from the liability created by the wrongful decision of some other partner.

Difference between LLP and Company:

• A company’s internal governance structure is based on the statue or the Companies ACT 1995. Whereas the governance of the LLP is maintained by a contractual agreement between of the partners.
• There is no management- ownership divide inherent in a LLP unlike that of a company.
• LLP is far more flexible when compared to a company.
• The compliance requirement of LLP is lesser than that of a company.

DIPN is a unique identification number which is mandatory for all present or proposed Designated Partners. DIPN never expires and an individual can have only one DIPN.

Yes, FDI is allowed in LLP under the automatic route under nominated sectors allowed by FIPB. However, FIIs and FVCIs will not be permitted to invest in Limited Liability Partnerships. Limited Liability Partnerships are not even permitted to avail ECBs.

After obtaining DIPN, they can be a partner in Limited Liability Partnerships. However, at least one Designated Partner in the Limited Liability Partnerships must be a Resident of India.

Apart from individuals, any organization can also become partner in a LLP. Moreover, foreigners & NRI’s are also allowed to become partners in a LLP.

No person can serve as a director in a LLP who does not have his own unique DIN (Director’s Identification Number).

Subject to MCA approval processing time, it usually takes around 14-20 days to get a LLP incorporated.

No, a salaried personcan become the member in LLP. There are no such legal bindings

Neither there is any minimum capital requirement nor any obligation to show proof of capital invested during the incorporation process. Moreover, partners’ contribution may consist of both tangible and/or intangible property and any other benefit to the LLP.

LLP cannot be incorporated for undertaking "Not-For-Profit" activities because 'carrying on a lawful business with a view to profit' is one of the essential requirements for setting LLP.

LLP requires an address in India where the registered office of the LLP will be situated. The premises can be a commercial / industrial / residential where communication from the MCA will be received. Thus, it need not be a commercial one only.

All the documents can be scanned and sent through email to our office & some documents will also have to be couriered to our office. Thus, there is no need to be physically present to incorporate LLP.

Identity proof, address proof& PAN card (for Indian nationals) is mandatory for all the proposed Designated Partners of the LLP. In addition, a no-objection certificate from the landlord of the registered office premises stating he has no objection for the same must be obtained along with his/her identity proof and address proof.

Subject to submission of documents by client, uniqueness of proposed name, & govt. approval speed, Rajput Jain & Associates can help a LLP get incorporated in around 14-20 days.

The proposed name of the Limited Liability Partnership must be very unique because names that are similar to an existing private limited company / limited liability partnership / trademark can be rejected and additional time will be required for resubmission of names.

Once a Limited Liability Partnership is incorporated, it will continue and be in-existence as long as it is not legally dissolved &the annual compliances are met regularly. In case, annual compliances are not complied with, the LLP will be deemed a Dormant and even its name may bestruckoff from the register of LLPafter a period of time.

LLPs are required to file an annual filing with the Registrar each year. However, if the LLP has a turnover of less than Rs.40 lakhs and/or has a capital contribution of less than Rs.25 lakhs, the financial statements are not required to be audited.

The Ministry of Corporate Affairs (MCA) mandates that allDesignated Partners must apply with a Digital Signature for Designated Partner Identification Number. Hence, a Digital Signature is required for all Designated Partner of a proposed LLP.

After obtaining Designated Partner Identification, they can be a partner in LLP. However, at least one Designated Partner in the LLP must be a Resident India.