Limited Liability Partnership
Limited Liability Partnership (LLP), introduced only in 2008, has quickly become a popular legal structure for businesses. Its main improvement over the General Partnership is that, as the name indicates, it limits the liabilities of its partners to their contributions to the business and also offers each partner protection from the negligence, misdeeds or incompetence of the other partners. The LLP is also cheaper to incorporate than a private limited company, requires fewer compliances and can be a smart choice from a tax perspective. However, if you're looking to raise venture capital or attract talent with employee stock options, private limited is the way to go as LLPs cannot easily accommodate it. This is why they are most popular with professional services firms (web designers or architects, for example) that require no equity funding.
Obtain Digital Signature Designated Partner Identification Number Name Approval Register the Memorandum & Articles of Association with the Registrar of Companies Time taken- 15- 20 working days, subject to ROC processing time
To incorporate a Limited Liability Partnership, a minimum of two people are required. A Limited Liability Partnership must have a minimum of two Partners and can have a maximum of any number of Partners.
The Designated Partners needs to be over 18 years of age and must be a natural person. There are no limitations in terms of citizenship or residency. Therefore, the LLP Act 2008 allows Foreign Nationals including Foreign Companies & LLPs to incorporate a LLP in India provided at least one designated partner is resident of India.
You can start a Limited Liability Partnership with any amount of capital. There is no requirement to show proof of capital invested during the incorporation process.Partner's contribution may consist of both tangible and/or intangible property and any other benefit to the LLP.
No,one of the essential requirements for setting LLP is 'carrying on a lawful business with a view to profit'. Therefore, LLP cannot be incorporated for undertaking "Not-For-Profit" activities.
An address in India where the registered office of the LLP will be situated is required. The premises can be a commercial / industrial / residential where communication from the MCA will be received.
No, you will not have to be present at our office or appear at any office for the incorporation of a Limited Liability Partnership. All the documents can be scanned and sent through email to our office. Some documents will also have to be couriered to our office.
Identity proof and address proof is mandatory for all the proposed Designated Partners of the LLP. PAN Card is mandatory for Indian Nationals. In addition, the landlord of the registered office premises must provide a No Objection Certificate for having the registered office in his/her premises and must submit his/her identity proof and address proof.
To incorporate a LLP quickly, make sure the proposed name of the Limited Liability Partnership is very unique. Names that are similar to an existing private limited company / limited liability partnership / trademark can be rejected and additional time will be required for resubmission of names.
Once a Limited Liability Partnership is incorporated, it will be active and in-existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the LLP will become a Dormant and maybe struck off from the register after a period of time.
LLPs are required to file an annual filing with the Registrar each year. However, if the LLP has a turnover of less than Rs.40 lakhs and/or has a capital contribution of less than Rs.25 lakhs, the financial statements do not have to be audited.
A Digital Signature establishes the identity of the sender or signee electronically while filing documents through the Internet. The Ministry of Corporate Affairs (MCA) mandates that allDesignated Partnersapply with a Digital Signature for Designated Partner Identification Number. Hence, a Digital Signature is required for all Designated Partner of a proposed LLP.
Designated Partner Identification Number is a unique identification number assigned to all existing and proposed Designated Partner of a LLP. It is mandatory for all present or proposed Designated Partner to have a Designated Partner Identification Number. Designated Partner Identification Number never expires and a person can have only one Designated Partner Identification Number.
Yes, a NRI or Foreign National can be a Designated Partner in a Limited Liability Partnership after obtaining Designated Partner Identification Number. However, atleast one Designated Partner in the LLP must be a Resident India.
Yes, Foreign Direct Investment (FDI) is allowed in LLP under the automatic route in sectors allowed by the Foreign Investments Promotion Board (FIPB). However, Foreign Institutional Investors (Flls) and Foreign Venture Capital Investors (FVCIs) will not be permitted to invest in LLPs. LLPs will also not be permitted to avail External Commercial Borrowings (ECBs.)
Yes, an existing partnership firm or a company that is unlisted can be converted into LLP. There are many advantages of converting a partnership firm into a LLP; however, the same doesn't apply for the conversion of a Company to a LLP.