Why register an LLP company?
After deciding on your business model, it’s important to choose between the Private limited company registration and LLP, by understanding their differences and advantages they provide, so as to choose what’s best for your business model.
The most vital reason for registering as LLP is the limited liability. The members of the firm are only liable for a small amount of debt incurred by it. This is entirely different from proprietorship and partnership where the personal assets of directors and partners are not protected if the business becomes bankrupt.
SEPARATE LEGAL ENTITY:
- LLP is a separate legal entity from the partners. Each partner can sue the other in case a situation arises.
- It has an uninterrupted existence that follows perpetual succession, i.e., the partners might leave, but the business remains. A term of dissolution has to be mutually agreed on for the firm to dissolve.
Transferring the ownership of LLP is also simple. A person can quickly be inducted in as a designated partner and the ownership switches to them.
SUITABLE FOR SMALL BUSINESS:
- LLPs having a capital amount less than 25 lakhs and turnover below 40 lakhs per year do not require any formal audits. It makes registering as LLP beneficial for small businesses and startups.
- An LLP can own or acquire property because it is recognized as a juristic person. Partners of LLP cannot claim the property as theirs.
NO OWNER/MANAGER DISTINCTION:
An LLP has partners, who own and manage the business. This is different from a private limited company, whose directors may be different from shareholders. For this reason, VCs do not invest in the LLP structure.
Quick and easy steps to register LLP in India – A detailed process
we make the process of registering for LLP seamless and hassle-free.
- Arrange basic documents of Partners
- Fill in an online form with accurate information
- Apply for Digital Signature and DIN of Partners
- Prepare all legal documents
- Apply to name availability of the proposed LLP
- Verification of all documents and forms by govt
- File Incorporation Docs with ROC
- Get LLP Incorporation Certificate
- Drafting of LLP Agreement
- Filing of LLP Agreement
STEP 1: OBTAINING DSC AND DIN
The first step is to obtain DSC of the desired partners of the Limited Liability Partnership. The reason for this is that all the forms need to be submitted online and require the directors’ digital signatures.
The law also requires that all directors file for a DIN number. The application has to be made in Form DIR- 3.
STEP 2: APPLICATION FOR NAME APPROVAL
This process involves registering the LLP. Before you do this, you would need to see if the name is already taken. You can check on the free search facility on the MCA portal. The registrar only approves LLP names that are not taken before.
STEP 3: LLP AGREEMENT
LLP agreement is very crucial in a limited liability partnership as it determines the mutual rights and duties amongst the partners, and between the LLP and the partners. The partners enter into the LLP agreement upon the LLP registration by filing form 3 online on the MCA portal. This procedure has to be done within 30 days of the date of incorporation.
STEP 4: LLP INCORPORATION CERTIFICATE
Once the registrar approves your MOA and AOA, you’re steps closer to getting your LLP registered. The next step is to get the LLP Incorporation Certificate. You can do by submitting all documents to the registrar. The time frame is between 2- 12 days. Once you get your LLP Incorporation Certificate, you’re ready to go.
STEP 5: APPLY FOR PAN & TAN & BANK ACCOUNT
As soon as you get the incorporation certificate, you need to apply for your company PAN & TAN with the NSDL. The cost for this procedure is less than Rs.200 and it takes around three weeks to get done.
Documents required for LLP registration in India
The method of LLP registration in India does not require much legwork when it comes to documents.
TO BE SUBMITTED BY PARTNERS
- Scanned copy of PAN Card or passport (Foreign Nationals & NRIs)
- Scanned copy of Adhar Card/ Voter’s ID/Passport/Driver’s License
- Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
- Scanned passport-sized photograph Specimen signature (blank document with signature [partners only])
- Note: Any one of the partners must self-attest the first three documents. In the case of foreign nationals and NRIs, all the documents must be notarized (if currently in India or a non-Commonwealth country) or apostilled (if in a Commonwealth country).
FOR THE REGISTERED OFFICE
Note: Your registered office need not be a commercial space; it can be your residence, too
- Scanned copy of latest bank statement/telephone or mobile bill/electricity or gas Bill
- Scanned copy of Notarised Rental Agreement in English
- Scanned copy of No-objection Certificate from the property owner
- Scanned copy of Sale Deed/Property Deed in English (in case of owned property)