Limited Liability Partnership (LLP) Registration
Under a Limited Liability Partnership (LLP), two or more partners form a special partnership and have limited liabilities.
Overview
LLP Registration Online
Limited Liability Partnership (LLP) in India took shape after January 2009, making it an instant success with startups and professional services. Limited Liability Partnership Registration, governed by the Limited Liability Partnership Act, 2008, combines the benefits of a partnership with that of a limited liability company. LLP was introduced to provide a form of business that is easy to maintain and to help owners by providing them with limited liability.
How To Register An LLP Company Online
You can operate your business under a Limited Liability Partnership in India online. We hold immense knowledge and expertise in LLP registration and help you in the following ways.
limited liability partnership
Advantages
For a Limited Liability Partnership registration in India, Cosmo is one of the most affordable and steadfast service providers.
An LLP can raise funds from partners, banks and NBFCs.(Non-Banking Financial Companies)
Post incorporation, an LLP can have limited partners.
If an LLP, where a partner is not liable for all losses of company.
If there is only one partner in an LLP, then the sole partner can find a new one, without dissolution.
The partners of an LLP have the right to manage the business directly
It is a separate legal entity.
Why register an LLP company? - Benefits
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.
Seperate 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.
Flexible Agreement:
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
Company Registration in India will boost the progress of startups and provide an additional edge over those who have not registered. The Ministry of Corporate Affairs governs the company registration process with rules and regulations framed following the law.
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.
The approval of the name will be made by the Registrar only if the Central Government does not deem it undesirable. The name should also not hold any resemblance to any of the existing partnership firms, LLPs, trademarks, or body corporates.
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
- Scanned copy of PAN card or passport (Foregin Nationals & NRIs)
- Scanned copy of Aadhar card / Voter’s Id/Passport/Driver’s License
- Scanned copy of latest bank statement/telephone/mobile bills/electricity bill / gas bill
- Scanned passport size photographs Specimen signature (blank document with signature [partners only])
Note: One Partner must self-attest the three documents.In the case of foreign nationals or NRIs, all the documents notarized.
To be submitted by Partners
- Scanned copy of notarized 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)
- Scanned copy of latest bank statement/ telephone/mobile bill/electricity/gas bill.
Check if your firm qualifies for LLP in India
Starting a business requires certain specific requirements to be fulfilled to be eligible for registering as an LLP.
The normal partnership structure and LLP share the same attributes when it comes to internal management, profit distribution and tax liabilities. But, it offers the partners less financial liability (limited liability).
Any business who has:
- At least two partners are required to form an LLP. There is no limit to the maximum number of partners
- The nomination of a natural person, if a body corporate is a Partner
- No shared capital requirement, though each partner must have an agreed contribution towards it.
- Minimum capital contribution: There is no minimum capital requirement for an LLP (or a company, for that matter). The LLP should have an authorized capital of at least Rs. 1 lakh.
- At least one Designated Partner as an Indian resident
- DPIN for all Partners
- DSC for all the Designated Partners
- Address proof for the office of LLP. The registered office of an LLP does not have to be a commercial space. Even a rented home can be the registered office, so long as an NoC is obtained from the landlord.
- With regard to the changes in the FDI regulations dated November 10, 2015, foreign investors are now permitted to have a 100% FDI in the automatic route LLP. The 100% FDI in the LLP is granted to foreign companies who operate in activities or sectors where 100% FDI is considered permissible through the channels of the automatic route. Also, there should not be any performance prerequisites that are linked to FDI. A definite interpretation of the terms such as ‘ internal accruals’ and ‘ownership and control’ has been provided with reference to the LLP. Thus, Foreign investment is made smoother and quicker with FDI in LLP.
- The LLPs will also be permitted to opt for downstream investment in a different company or even choose LLP in those sectors which allow 100% FDI in accordance with the automatic route. This does not come up with any performance constraints that are FDI linked.
Factors to consider while selecting a name for your LLP in India
The Registrar of Companies (RoC) has issued naming guidelines for LLPs. It is essential that you follow the rules closely or your application may end up getting rejected, leading to a much longer process.
Unique Component:
In AlphaBeta Internet Private Limited, AlphaBeta is the unique component. Now, once taken, the name will not be given to any other business in categories related to the Internet.
Blacklist:
Abbreviations, adjectives and generic words are rejected. So XYZ would be rejected, as would Good Quality Biscuits. The words bank, exchange and stock exchange, unless approved by RBI or SEBI, would also be rejected.
No Common Trademark:
There should not be a registered trademark by the same name on the IP India website. If there is one, the name can only be approved if you are able to get a No-Objection Certificate from its owner authorising you to use it.