Online Limited Liability Company Registration

What is LLP?

A limited liability partnership is a type of business structure in which the liability of all the partners is limited. It means that each partner will be responsible himself only for his actions or debts irrespective of others.

It is very easy to manage the operations of LLP. That's why , it is said to be the best suited for small and medium level business houses. As, LLP is a form of partnership which is separate from its partners it means that each partner is free to buy its assets , enter into contracts and is capable of accusing someone and being accused in case of any illegal activity.

Benefits of LLP incorporation

1. Flexible - It is a flexible type of business structure as it is very easy to start and one can make changes as required. It is very protective way for the partners because if something goes wrong , one can fix it easily with mutual understanding.
2. Free from the problem of dual taxation - LLP is not like other corporations. Here the profit and losses are transferred to the partners account and then tax is charged on their personal tax return. In this way, it avoids the problem of double taxation.
3. Easy to Manage - LLP is very easy to manage as the risk involved is limited. So, the involved partners can easily manage the functions of LLP. It can be used by people with different professions including lawyers, accountants as well as small and medium businesses.
4. Cheaper Cost - The process of LLP registration requires very less cost and documentation as compared to other business corporations. It is a great option for startups and small enterprises in order to save money.
5. Zero Minimum Capital - In order to form the LLP, there is no need of huge investments as there is no policy of fixed minimum capital. So, one can start the LLP with the least amount of capital they may have.
6. Limited Liability Protection helps in protecting personal assets of owners.

LLP Registration requirements and eligibility criteria

In order to qualify for LLP company registration in India, one should fulfill the following requirements

1. There should be minimum two partners in order to form an LLP
2. There is no set upper limit on the maximum number of members
3. Among of all the partners, atleast one authorised partner must be the resident of India.
4. Corporate bodies or individuals, both can be the partners.

Documents required for LLP registration

To register an LLP, you need to provide the following documents

• 01Identity Proof of all the partners
• 02Residential Proof of all the designated partners
• 03Must obtain a Digital Signature Certificate (DSC) and (DPIN) of all the partners
• 04Agreement for LLP
• 05Pan Card or Passport ( Passport for non-residents of India)
• 06Proof for Listed office residence which includes rent agreement, electricity bill, NOC from the renter

How to register LLP in India

For registering an LLP in India, you have to follow the following steps

Obtain a Digital Signature Certificate (DSC)- To register LLP, the first step that need to be taken is tk obtain DSC. It is a digital signature certificate which is used to sign the documents digitally. One can get if from MCA portal in order to sign the LLP agreement and other necessary documents.

Get a Designated Partner Identification Number (DPIN)- The second step in the process is to get DPIN which serves as a unique identifation number for each.

Make a choice of Unique name for LLP- Another important step is to choose a different name for LLP. This means it should not be similar to any other available LLP names. For this, you have to check the availability of name for LLP on MCA portal so that it should not be matched to any another available names. After this, submit the fees for application and get it approved by MCA and after its approval, you will receive an approval letter.

Draft the Agreement for LLP - The next step is to prepare an agreement for LLP. It is a official document containing the rights and duties of the partners, their revenue sharing ratio and other terms and conditions. It should include all the required elements of LLP's process.

Filing of LLP agreement with MCA - After preparing the agreement, it is important to file it with the MCA along with other officials such as Form 2 and Form 3. Toh will be needed to spend money on registration fee and stamp duty on the basis of capital contribution of LLP.

Obtaining Certificate of Incorporation - The certificate of Incorporation is a official document that reflects the your LLP is registered offically and is ready to start the business. After proper verification of documents, MCA will issue th certificate of Incorporation.

How much time it takes for LLP registration

The turnaround time for registering an LLP may differ on the basis of document verifying process and how quickly the government approves. It might takes around 14-15 days to get everything done.

Features of LLP Partnership

• Separate Legal Entity - LLP is a separate legal entity which means it is separate from its partners and can buy property, enter into transactions and is capable of suing and being sued in its own name.
• Financial Security - LLP provides financial security to its partners because in case of debts, there is risk to the personal assets of the partners.
• Less paperwork - LLP registration involves less documentation in comparison to other big corporates. The feature makes it best suitable among the other corporations.
• Perpetual Existence - LLP is separate from its partners so there will be no affect in its existence due to any partner's death or resignation.

Checklist for LLP registration online

• Designated Partners - For registration of LLP, there is a need of atleast two designated partners and there is no limit on the maximum number of partners.
• Decide on the name - Make a choice of unique name and check its availability on the MCA portal whether meets the LLP guidelines or not.
• Obtain DSC - The partners involved in LLP must obtain a Digital Signature Certificate (DSC) in order to sign the documents digitally for filing.
• Obtain DPIN - It is mandatory for the designated partners to obtain a Director Identifation Number from the MCA portal.
• LLP Agreement - Prepare a official document named as the agreement for filing including rights and duties of designated partners, their revenue sharing ratio etc and submit it with Registrar of Companies (ROC)
• Obtain Certificate Of Incorporation - After drafting the LLP agreement, toh will be needed to file a form in order to get a certificate of incorporation.
• Apply Pan and Tan - You have to obtain Pan and Tan for LLP registration.

As per the rules of LLP Act, LLP has less compliances to follow in comparison to another business corporations. These compliances are there to make sure that everyone can know what is happening in the business including government, creditors, investors, tax departments, partners and can trust the business. These rules are not just important but mandatory to follow.

These compliances can be divided into four groups - things you only do on e after establishment, annually, things you do on specific events and routine compliances. Here we will discuss about one time compliance and annual compliance.

One time Compliance - LLP is not very complicated as it has only a single one time compliance which involves the submission of LLP agreement to ROC.

Annual Compliance - In case of yearly compliance, an LLP is needed to provide annual returns to the ROC, income tax returns to the income tax department and other necessary financial particulars with the statements of solvency to ROC every accounting year.