Limited Liability Partnerships (LLP) is a type of legal business entity separate from its partners. It is often termed as a hybrid of a company and a partnership firm as it contains characteristicof both ‘a corporate structure' as well as ‘a partnership firm structure. By Incorporating an LLP one gets the benefits of both limited liability Company as well as the flexibility of a partnership firm. Since it is a separate legal entity,retirement or death of a partner would not dissolve the LLP.
LLP shall have at least two partners and two individuals as Designated Partners. An Individual can hold position of both partner and Designated Partners. There is no limit for maximum number of partners in LLP.
The partners of a LLP have limited liability i.e. they are not liable beyond the money contributed by them, In case of Insolvency,personal properties of the partners cannot be sold by the court to repay the liabilities of the LLP. It is suitable for small and medium enterprises due to flexibility in its structure and operation.
The name of the Limited Liability Partnerships is also protected by registration i.e, The Registrar never allow name to be registered, which are identical, similar or resembling with the existing name of an LLP. Once your LLP is registered and certificate, no other person can register another LLP with the same name.
Documents Required for LLP Registration
Limited Liability Protection
In case of Insolvency, the court cannot sell personal properties of the partners to repay the liabilities of the LLP. Partners will lose only the Capital Contributed by them
A Limited Liability Partnership having turnover of greater than forty lakhs rupees or capital contribution of more than rupees twenty five lakhs are only required to get its accounts and financial statements audited.
A Limited Liability Partnership is not required to pay Dividend Distribution Tax charged by Income tax department.
Name of the LLP is protected
The Registrar does not allow name which are identical, similar or nearly resembles with the existing name of an LLP. Once your LLP is registered, any other person cannot register another LLP with the same name
Obtain Digital Signature Certificate
Every Registration documents of LLP are filed electronically. Digital signatures of the Partners are required to file the application forms for Registration. DSC can be obtained from any of the government-approved vendors like TCS, e-Mudra, n-Code solutions,etc. It ensures security and authenticity of the documents.
No person can become a Designated Partner in any limited liability partnership without obtaining Designated Partner Identification number (DPIN).It is a unique number that is assigned to the partners of LLP for their identification. DPIN once obtained is valid for lifetime.
The proposed names for the Limited Liability Partnership (LLP) first need to be checked if they are available for registration or not. While making application for reservation of name, we should consider the parameters specified under the naming guidelines like the name of the LLP should not resemble or match with the name of other existing registered firms.
After name approvalIncorporation/Registrationdocuments of Limited Liability Partnershipare require to be prepared which includes Subscriber sheet, Id proof and address proof of Partners, the address of LLP, Consent of all the partners etc. All the documents for incorporation along with the application form are submitted electronically.
Certificate of Incorporation
Once the Registration forms are scrutinized and approved by Registrar of LLP,Certificate of Incorporation is issued. After successful incorporation, every LLP is issued with LLP identification number. After receiving the certificate of Incorporation the LLP is set to roll out its function.
Filing of LLP Agreement
Within 30 days of incorporation, the LLP agreement must be filed in e-form 3, this has to be submitted to the Registrar of LLP. The agreement must be executed on a requisite value of stamp paper as per the requirement of respective State Stamp Act.
Common Questions - LLP Registration