Limited Liability Partnership or LLP is an entity defined under the Limited Liability Partnership Act, 2008.
- The concept of LLP is increasingly being popular due to being a hybrid of a partnership firm and a company.
- While a partnership firm has its own cons,
- The concept of LLP has tried to incorporate the benefits of a company in a partnership firm.
Exclusive Benefits
Separate Legal Entity
- Being a company, it has a separate legal entity.
- The liability of the LLP is limited only to the extent of contribution made by each partner.
Convenient to Register
The registration of LLP is not cumbersome and the cost involved in it is low.
No Capital Contribution requirement
Like other companies under the Companies Act 2013, there is no such requirement of minimum capital contribution.
Less Compliances
Compared to other companies, there are less compliances to be made in case of LLP
No Audit requirement
- There is no requirement of compulsory audit except,
- When the turnover and the capital crosses 40 lakhs and 25 lakhs respectively
Checklist for Registration
Here is a checklist of the procedures to be carried out for the registration of LLP.
- Obtain Digital Signature Certificate of the proposed directors.
- Apply for Director Identification Number
- Get the name Approval from Registrar
- Frame an LLP agreement between the partners.
How to Register?
- Since the LLP is a company, it requires filing application for Digital Signature Certificate or DSC of the proposed directors in the LLP.
- Apply for the Director Identification Number or DIN through form DIR 3 duly signed by the Director or a Company Secretary in full time employment of the company
- Search for the free name service available on the MCA portal and,
- File the Limited Liability Partnership- Reserve Unique Name or LLP-RUN form stating the proposed name to the Registrar,
- The approval of which will grant you your LLP name.
- File Form for incorporation of Limited Liability Partnership with
- The Registrar of the state in which LLP is situated which will include the approved name of the LLP.
- Draft a LLP agreement between the partners and get it printed on a stamp paper after which you will need to file it in form 3 on the MCA portal within 30 days of the date of incorporation.
Documents required
- PAN card of partners
- Passport size photographs
- Address proof of partners
- Prescribed photographs
- Evidence of Registered Office Address
- Digital Signature Certificate
- LLP agreement
- Stamp paper
FAQs
What is the minimum and maximum number of partners required to incorporate LLP?
Minimum 2 partners are required in an LLP and there is no upper limit for the number of partners.
Can an existing company be converted into LLP?
Yes the existing company can be converted into LLP. Form 18 and Form 2 needs to be filed with the registrar
Can the name of LLP end with words ‘Pvt. Ltd’?
The name of the LLP can end only with the words ‘Limited Liability Partnership’ or ‘LLP’. Only the word Limited is permitted to be used in such manner as prescribed.
Do LLPs have to file Annual Return?
An Annual Return is required to be filed every year with the Registrar within a period of 60 days of the termination of financial year.
Whether a minute book needs to be maintained in LLP?
Yes there is a requirement of minute book to be maintained to record meeting among the partners.
Are there any compliances relating to meetings in LLP?
No, there is no such compliance relating to meetings. The partners can meet as and when they will.
When is the LLP required to be audited?
An LLP is required to get its books audited when its turnover crosses 40 lacs or its capital crosses 25 lacs.
Can we change the registered office of the LLP after registration?
Yes you can change the registered office by following a prescribed procedure.
What is Form 9?
Form 9 is a form to provide consent to be appointed as designated partners in the LLP.