LLP registration

Limited Liability Partnership Registration

Limited Liability Partnership (LLP) is considered as one of the easiest forms of business entity introduced under limited liability partnership act, 2008. LLP full form is limited liability partnership. This form of business entity limits the liabilities of its owners and simple to manage.

This business structure is very popular among professional, micro & small businesses (family owned or closely owned) because of its easy incorporation process & few compliance requirements. Partners in limited liability partnership are not personally liable to the creditors of the company. If any problem occurs, creditors/banks can only sell the assets of the company but not the director’s personal assets.

In this form of business entity, one partner is not responsible for the negligence or misconduct done by another partner. LLP formation is less expensive as compared to private limited company registration. LLP doesn’t have the right to issue equity shares. It is suggested that you should not choose LLP as your business entity in case you are having plans to raise equity fund from venture capitalist, angel investors or private equity funds. In order to apply for LLP registration in India, you need to fill a simple application form & need to submit it online through FinacBooks.

Limited Liability Partnership Act 2008

Limited liability partnership act 2008 is the act introduced by the central government to make provisions for the incorporation and regulations for limited liability partnership in India. LLP is a legal entity separate from its partners. As per LLP act, LLP itself enter into contracts as a separate legal entity. In LLP, accounts audit is mandatory in case turnover of a company in any financial year exceeds Rs.40 lakhs & contribution made by partners exceeds Rs.25 Lakhs.

Eligibility for LLP Registration in India

• At least two partners
• No minimum requirement of capital
• Minimum one partner should be an Indian resident
• Registered office should not be situated in a commercial space

Checklist for Limited Liability Partnership in India

In order to get eligible for LLP registration under limited liability partnership act 2008, you need to understand and fulfill certain important requirements –

• Minimum 2 members are required for LLP incorporation. No upper limit to the maximum number of partners for LLP formation.
• One of the designated partners in LLP must be an Indian.
• DPIN for all partners.
• DSC for all partners.
• Address proof of LLP registered office (You can even use your rented home as registered office as long as you are having NOC from the landlord).
• No minimum amount of capital required as contribution for LLP company.
• The nomination of a natural person in case body corporate is a partner.

Documents Required For LLP Registration

There are various documents which you need to provide in case of LLP registration. Early & Correct submission of documents leads to fast application approval –

Documents of Partners

• Photograph – Latest passport size photograph of all partners is a mandatory requirement for LLP registration. Passport size photograph should be clear, preferably with white background.
• PAN card of partners – PAN cards of all the designated partners are required at the time of LLP registration. It serves as a primary identification proof.
• Identification proof of partners – You can submit any of the identification proofs in support of your application for LLP registration –
• Voter’s ID card
• Passport
• Aadhaar card
• Driving license etc.

Make sure that the spellings of your name & other details mentioned on ID proof should be correct and exactly the same as mentioned in the PAN card. In case any information mentioned on the ID proof is incorrect or doesn’t matches with the PAN card, it should be corrected before submission of your documents to registrar of companies (ROC).

• Address proof – Passport, Voter’s ID card, latest bank statement, electricity bill, water bill, telephone bill, mobile bill can be submitted as address proof in order to get LLP registration. Make sure that any bill or statement you are giving in support of your application should not be older than 2-3 months and the name on address proof should matches with the name mentioned on the PAN card.
• Passport (In case of foreign nationals/NRI’s) – It is mandatory for foreign national or an NRI to submit passport in order to become a partner in an LLP. Passport must be notarized or apostilled by the relevant authorities in the country where NRI or foreign national resides. However, Indian embassy situated in that particular country also having the right to approve your documents.
  NRI’s or foreign nationals need to submit their address proof which can be a residence card, bank statement, driving license or any other address proof issued by the government.

Documents of LLP

• Proof of registered office address – Registered office address proof needs to be submitted at the time of LLP registration or within 30 days of incorporation. In case the registered office is rented, you need to submit rent agreement and NOC from the landlord. Utility bills like telephone bill, gas bill, electricity bill etc. can also be submitted as a registered office address proof but it should not be older than 2-3 months.
• Digital signature certificate – It is mandatory for one of the designated partners to opt for digital signature certificate. All application & documents should be digitally signed by the authorized signatory.

Important forms in Limited liability partnership in India

Some of the important forms related to Limited liability partnership are as follows –

• RUN-LLP – RUN-LLP form is used to reserve a name for LLP.
• Form FiLLip – Form FiLLip is used to submit application for incorporation of limited liability partnership.
• Form Appendum to Fillip – This form contains details of designated partners as well as partners of LLP.
• Form 4 – Form 4 is used to make modifications in name or address or designation of a partner or in consultation of becoming a partner. It is also used to give notice of appointment, cessation.
• Form 5 – Form 5 is used to submit application for name change.
• Form 11 – Form 11 is used to submit annual returns of limited liability partnership to the income tax department.
• Form 15 – Form 15 is used to submit application for change in registered office place.
• Form 17 – Form 17 is used to submit application for converting a firm into LLP.
• Form 18 – Form 18 is used to submit application for converting private company /unlisted public company into LLP.

LLP Formation Procedure in India

In order to form an LLP, you need to follow the following LLP registration/LLP incorporation procedure -

Compliance for LLP Company in India

Every LLP needs to follow the below mentioned compliance requirements –

Penalties Provisions in LLP annual compliance

The penalties you need to pay for non-filing of annual compliances are as follows –

• It is mandatory for an LLP to follow all annual compliances such as filing of LLP’s financial statements via form 8 & annual return via form 11. In case of failure, you need to pay penalty of Rs.100 per day for each registered agreement.
• Every LLP should submit income tax return filing annually for which the last date is 30th September. In case, you miss the deadline, a penalty of Rs.5000 will be imposed and filing must be done before 31st December. If you fail to file income tax return before that deadline too, the amount of penalty will be double i.e. Rs.10000.

Factors to be Considered While Choosing Your LLP Name

For every business entity, company name is very important. It is the first impression for your stakeholders, suppliers and the buyers. The company name should be short, attractive and relevant. You need to take care of various factors while choosing a name for your LLP -

• Simple & short - The name of your company should be concise and short. People should be able to pronounce it easily and recollect the name as early as they read it or hear it.
• Meaningful - Your company name should be related to your business. It should make your brand value in the market.
• Not illegal or offensive - The name of your company should not be offensive/illegal. It should not be abusive and against the beliefs and customs of any religion or group.
• Suffix - In case of a limited liability partnership, your company name should end with suffix “LLP”. For example - In case of a private limited company, the company name ends with suffix “Private Ltd.”
• Unique name - Your company name should not be identical or similar to the name of an existing trademark or a company.
• Blacklist – Abstracts, adjectives and generic awards are denied. Even words like Bank, exchange and stock exchange are also not allowed to be used.

Check LLP Name Availability in India

Naming an LLP is often complex and a time consuming process because of several rules & regulations which an applicant needs to follow before naming an LLP. As per Companies act 2013 & LLP act 2018, we have to take that name into consideration which is acceptable and compliant with the rules & regulations of these acts. If you want to search your proposed LLP name to identify that whether the name you have selected or any similar name exists, go to MCA portal and search for the name availability.

What is the Right Business Structure for You?

It is not easy to choose right business structure as you need to take many factors into consideration before selecting a business entity. Below table not only helps you in giving information about various business structures for Company Registration. It also helps you in choosing the business structure which suits you the most.