Limited Liability Partnership (LLP)
Reviewed by Aug 27, 2020| Updated on
Limited Liability Partnership (LLP) is one of the many kinds of business constitutions that is popular across the globe. Further, it has become a preferred form of business structure for groups of entrepreneurs to conduct business. It is advantageous as it includes both the benefits of a partnership firm as well as a company in a single form of organization.
What is LLP?
In India, Limited Liability Partnership (LLP) is defined as an entity formed and registered under the Limited Liability Partnership Act, 2008. In short, it means a partnership firm that is incorporated under the LLP Act. Apart from this, it takes the form of a separate legal entity having a continuous succession, similar to companies.
The features of LLP can be listed down as follows:
- LLP has a separate legal entity similar to companies.
- The partners constituting the LLP have limited liability to the extent of the contribution made by them.
- LLP can be formed at a comparatively lower cost as against a company.
- In comparison to companies, there is lower compliance and fewer regulations.
- There is no need to meet the minimum capital contribution.
- Minimum of two partners are needed to constitute an LLP, without an upper limit set.
- An LLP agreement must be entered into by the partners to govern their rights and duties.
Steps to register as an LLP
Before beginning with a business under LLP, the entity must register as an LLP under the LLP Act. It approximately takes fifteen days to complete the entire process of obtaining a digital signature certificate and LLP registration.
Pre-requisites for registration of an LLP:
- The designated partners, at least two of them, must have a valid digital signature certificate or obtain a new one.
- Two selected partners must obtain the Director’s Identification Number (DIN).
- Documents of partners that must be kept ready for submission are as follows:
- PAN Card/ ID Proof of the Partners
- Address Proof of the partners
- Residence Proof of Partners
- Passport (in case of Foreign Nationals/ NRIs)
- Documents of the company that must be kept ready for submission are as follows:
- Proof of Registered Office Address
- Digital Signature Certificate
The applicant must use form FiLLiP (Form for incorporation of Limited Liability Partnership) for incorporation. Such applicant should submit the form to the Registrar having jurisdiction over the state in which the LLP is situated. Fees as per Annexure ‘A’ must be paid.
This form also provides to apply for the allotment of the Designated Partner’s Identification Number (DPIN) in case the partner does not have a DPIN or DIN.
RUN-LLP is a platform to reserve a suitable name for your LLP. The application for the name reservation may be made via FiLLiP too. If the name is approved, such name shall be filled as the proposed name of the LLP.
File the LLP agreement with Form 3 online on the MCA Portal within thirty days from the date of incorporation. The LLP Agreement is to be printed on a stamp paper, the value of which differs for every state.