Articles

Browse Articles » Business » LLP Registration Procedure in India & How...

LLP Registration Procedure in India & How to get it

by Swarit Advisors Financial Service Consultant

Defining a Partnership firm

‘The Indian Partnership Act, 1932, Section 4 states the rules, regulations and laws of a partnership firm. Partnership companies are governed by the provisions mentioned in the act. According to the act, a partnership firm is defined as “The relation between individuals who have agreed to share the profits and losses of business.”

Meaning of a Limited Liability Partnership

Limited Liability Partnerships are preferred by Professionals, Small Business Owners and businesses that lack adequate capital or a business idea where the individual is looking to start a company with a minimum amount of investment.

Four important steps to follow for the Registration of Partnership Firm

· Drafting of Partnership Deed

· Notary and Stamping of Partnership Deed

· Filing of Partnership Firm Registration Form

· Filing of PAN application for Partnership Firm

Types of Partnership Companies

The partnership companies are categorized into 4 major types as mentioned below-

General Partnerships(GP)
Limited Partnerships(LP)
Limited Liability Partnerships(LLP)
Limited Liability Limited Partnerships(LLLP)

Limited Liability Partnership Online Registration Procedure

As per the LLP Act, 2008, the necessary steps to be followed for a LLP registration procedure are as mentioned below-

Appoint partners and other crucial members
Acquire Digital Signature Certificate (DSC)

· Filing an application for DPIN (Designated Partner Identification Number)

· Reserving a name of the company

· Draft the LLP Agreement

· Filling the Incorporation Application form

· Filing the Fillip Form.

A Fillip is a form of incorporation of Limited Liability Partnership. Form 5, Form 17 and Form 18 must be filled and submitted for approval to the Registrar after which a Certificate of Registration will be received. Later, the partners receive LLPIN (Limited Liability Partnership Identification Number)

Benefits of starting a Limited Liability Partnership firm

A preferred company type for specific business types

Limited liability partnerships can be created by some types of professional service businesses that hold some specific specializations, such as accountants, architects, dentists, doctors, analysts and other fields in which the individual or a group of individuals are professionals under the law.

Security of Personal assets

The personal assets of partners in an LLP cannot be used to pay off business debts and liabilities. The LLP does not guard the partners for incurring liabilities as a result of their personal acts.

· Taxation benefits

Profits earned by LLPs are subject to taxes at 30% plus surcharge. However, sharing of profit amongst the members is not liable to tax under current tax structure.

The income tax rate applicable for LLP’s registered in India is 30% on the total income. In addition to that, an extra amount is charged on the income tax payable at the rate of 12% once the total income reaches to Rs 1 crores.

Eligibility Requirements for LLP Registration

· Minimum two designated partners,

· One of the partners must be an Indian resident,

· All the designated partners must have DPIN (Designated Partners Identification Number),

· Every designated partner is required to hold DSC (Digital Signature Certificate),

· The applicant must have the address proof of the registered office which can be either a residential or commercial place.

Documents Necessary for Limited Liability Partnership Registration in India

Certain documents required for LLP Registration for an appropriate filing are as mentioned below-

From the designated partners

· A copy of PAN card of the designated partners,

· A copy of an Aadhaar card of the partners,

· Address proof which includes mobile or telephone bill, bank statement,

· Identity proof of all the partners such as Passport or Driving license or Voter’s ID card at the time of incorporation,

· Passport-size photograph of every director and shareholder,

· If any of the partners is an NRI or a foreign national, then he should present the certified passport.

For the proposed registered office (Residential / Commercial)

· Current address proof of the registered office, for instance, electricity bill or water bill or property tax receipt,

· If the office is situated on a rented location, NOC (No-Objection Certificate) from the owner is compulsory;

· A copy of Notarized Rental Agreement, if the property is rented.

Benefits of LLP Company Registration

A Limited Liability Partnership serves many benefits, which is why it is the type of company preferred by many individuals. The various benefits it serves are-

· Low Registration cost

· Restrictions on the Investment amount are minimum

· Audit is not required or mandatory

· Minimal Compliances to follow

· Non- applicability of Dividend Distribution Taxation

· Perpetual Existence

Low Registration cost

Just like in other company types, the cost of registration for Limited liability partnerships are less, thus making it simpler to start a LLP.

Restrictions on the Investment amount are minimum

The investment amount is not fixed; thus the partners can contribute any amount. The partners can only contribute tangible, movable, steady or intangible property.

Audit is not required or mandatory

LLP companies do not have to follow the regular auditing process. However, private limited companies, public limited companies and other types of companies must have properly maintained audited accounts.

Minimal Compliances to follow

There are no specific set of compliances for Limited Liability Partnership companies, which makes the running of the LLP less complicated.

Perpetual Existence

The company is a separate entity that is distinct from its owners. This means that it is going to continue its business activities even if one or more partners of the company leave, resign or is terminated from the company.

Source: https://medium.com/@singhparul/llp-registration-procedure-in-india-how-to-get-it-bfa0b220cb71