Unlock the Power of an LLP: Partnership Flexibility + Limited Liability Protection
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All About Limited Liability Partnership
LLP, which stands for Limited Liability Partnership, combines elements of both traditional partnerships and companies. It inherits some characteristics from traditional partnerships while also sharing similarities with companies.
The evolution of LLP registration is primarily due to its straightforward formation process and simple maintenance requirements. One of its key benefits is the ability for owners to limit their liabilities, a significant advantage over traditional partnership firms.
Incorporating an LLP provides the limited liability features of a private limited company along with the flexibility of a partnership firm. Individual partners are shielded from joint liability arising from the unauthorized actions of other partners, enhancing the appeal of this form of organization. LLPs are often preferred by professionals, micro, and small businesses, especially those that are family-owned or closely-held.
The Limited Liability Partnership (Second Amendment) Rules of 2022, introduced by the Ministry of Corporate Affairs (MCA), have further simplified and streamlined the LLP registration process. All LLP forms are now web-based, making registration procedures more accessible and transparent. Additionally, LLPs can now be incorporated with up to 5 designated partners without the need for a Director Identification Number (DPIN). Furthermore, LLPs are allotted their Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) along with the Certificate of Incorporation, eliminating the need for separate applications.
Choose your package
Transparent Pricing | Confidentiality Assured | Efficient delivery
Basic
- 2 Digital Signature Certificates
- 2 Director Identification Numbers
- LLP Incorporation Certificate
- LLP Agreement
- PAN
- TAN
Standard
- 2 Digital Signature Certificates
- 2 Director Identification Numbers
- LLP Incorporation Certificate
- LLP Agreement
- PAN
- TAN
- SSI/MSME Registration
- GST Registration
Enhanced
- 2 Digital Signature Certificates
- 2 Director Identification Numbers
- LLP Incorporation Certificate
- LLP Agreement
- PAN
- TAN
- SSI/MSME Registration
- GST Registration
- DIR 3 eKYC for two Designated Partners
- 1st Annual Filing upto turnover of Rs. 40 Lakhs
Documents Required
Photograph of all the Partners
PAN Card of all the Partners
ID Proof of all the Partners (Driving License/Passport/Voter ID)
Electricity Bill or any other utility bill for the address proof of the Registered Office
Benefits of getting LLP Registration
Audit Not Mandatory:
LLPs are not required to undergo mandatory audits. An audit is only necessary if the LLP's turnover exceeds Rs. 40 lakh or its capital contribution surpasses Rs. 25 lakh.
General FAQs on DSC
Q1: Is the LLP Act applicable to specific services regulated by statutes?
A1: No, the LLP Act does not limit its applicability to specific services regulated by statutes. Any two or more persons aiming to conduct a lawful business for profit can establish an LLP. Initially recommended by the Naresh Chandra Committee, the LLP framework is not confined to professional services alone, as various inputs received by the Ministry suggested its suitability for small entities and venture capital-funded enterprises.
Q2: Who are the likely users/beneficiaries of the LLP Law?
A2: The LLP Law caters to a diverse range of users and beneficiaries in India. With the country’s thriving services sector and internationally recognized professionals, combining entrepreneurship knowledge with risk capital is essential for sustaining economic growth. The LLP framework accommodates enterprises providing various services, especially in new knowledge and technology-based fields where the traditional corporate structure may not be suitable.
Q3: Can entities with charitable or not-for-profit objectives set up under the LLP Act?
A3: No, entities with objectives like charitable or not-for-profit purposes cannot establish under the LLP Act, as it necessitates conducting a lawful business with a profit-oriented motive.
Q4: Are the provisions of the Indian Partnership Act, 1932 applicable to LLPs?
A4: No, the provisions of the Indian Partnership Act, 1932 do not apply to LLPs.
Q5: Why was a new legislation for LLP necessary instead of amending existing acts?
A5: The Companies Act is not conducive to the liability and governance structure intended for LLPs, as it primarily regulates widely-held companies. Additionally, traditional partnerships under the Indian Partnership Act involve full joint and several liability of partners, which may not suit enterprises in sectors like biotech, information technology, and intellectual property. The LLP structure facilitates growth and flexibility, enabling firms to expand their business domestically and internationally.
Q6: Which committees recommended legislation on LLPs in India?
A6: Several committees, including the Bhat Committee, Naik Committee, Expert Committee on Development of Small Sector Enterprises, and the Committee on Regulation of Private Companies and Partnerships headed by Sh. Naresh Chandra, recommended legislation on LLPs.
Q7: Did the Ministry adopt a consultative approach while introducing the LLP Act?
A7: Yes, the Ministry of Corporate Affairs adopted a consultative approach by inviting opinions and suggestions from stakeholders through a Concept Paper on LLP Law. The Act was formulated based on inputs received and in line with international practices.
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