LLP Registration in India
Limited Liability Company Registration was never so easy and fast. Name Approval, DIN, DSC, LLP Registration Certificate and LLP Agreement filing along with PAN and TAN Numbers are included in our Package.
LLP Registration in India: Overview
LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’, LLP is called a hybrid between a company and a partnership.
Package Inclusions:
- Name Availability Search
- Digital Signature (DSC)
- DIN for LLP Partners
- Main Object Drafting for LLP
- Follow up with ROC
- Registration Certificate of LLP
- e-PAN of the LLP
- TAN Number for the LLP
- Drafting of LLP Agreement
- Filing of Form 3 to the ROC
- GST Registration
- MSME Registration
Checklist for LLP Registration in India
Before incorporating an LLP, there are certain basic requirements that have to be met. These requirements relate to the number of partners, designated partners, and name and address of the LLP. You can refer to the table below, for detailed information to prepare for the incorporation of LLP.
Shareholders are the co-owners of the company. They can either be individuals or non-individuals, Indian or foreign in origin. Directors, on the other hand, are responsible for controlling the management of the company and acts as its agent. They are appointed by the Shareholders of the Company. Only individuals can be appointed as directors, whether Indian or foreign in Origin.
The Companies Act caps the limit of shareholders in a Private Limited Company to 200. For counting the said number of shareholders the shareholding by present or ex-employee under ESOP scheme is not counted. The company can have a maximum of 15 directors, however in case more directors are required the same may be increased with the approval of the Registrar of Companies.
Out of all the directors appointed in a Private Limited Company, at least one should be a resident Indian. Under the Companies Act, a director is considered to be a resident Indian if he has resided for more than 120 days in India in the immediately preceding financial year. Prior to the 1st of April 2021, this limit was more than 182 days. However, in a notification dated 1st of February, 2021, the MCA amended the provisions of the Companies Incorporation Rules, to reduce this limit to more than 120 days. This notification, and hence, the altered limit became effective from the 1st of April, 2021.rs are required the same may be increased with the approval of the Registrar of Companies.
The name of a company is the perfect way to communicate its brand to the general public. So, the name must not only be unique, but must also ideally communicate the business activity of the company. or the industry that it belongs to very aptly. Moreover, there are several significant laws like the Companies Act, the Trademark Act, and the Names & Emblems Act that prescribe certain guidelines for naming a Private Limited Company. Precisely, the name must not be identical or closely resemble the name of an existing company / LLP / a Trademark. More importantly, it must not be misleading and, therefore, must not contain words that show the patronage of the Government.
A Private Limited Company must be incorporated or registered with a valid office address. This is the address where all the correspondence and official communications for the company shall be addressed. Moreover, the company will have to maintain all its statutory documents, records and registers and this address only. The premises where the registered office is located can be rented or self-owned. It must be a fully-constructed and lockable premise on residential or commercial land.
Benefits of LLP Registration in India
A Limited Liability Partnership was introduced with the primary objective of overcoming all the flaws that a traditional Partnership Firm has. Its features closely resemble those of a limited company, enabling it to offer several unbelievable benefits to all its stakeholders, including its partners, investors and creditors. You can refer to the table below for complete information on all such benefits. Click to know more about benefits of LLP Registration.
Limited Liability
Liability of Shareholders is limited only to the capital they have subscribed to.
Attractive for investors
Investors find it attractive for funding because of the availability of public records at ROC.
Preferred by Creditor
Legal credibility and high growth potential makes a company preferable for funding.
Easy to Incorporate
Incorporation is 100% online and easy to process and can be completed in a few days.
Low Income Tax
Companies enjoy favourable tax rates in comparison to other forms of business.
Perpetual Existence
The company exists beyond the life of its shareholder until it is wound up.
Documents Required for LLP Registration in India
Documentation is the most significant aspect of Limited Liability Partnership Registration as the approval and rejection of your entire application depends on the accuracy of their filings to the ROC. Documents required for Limited Liability Partnership Registration can be divided into two categories, namely, the documents of the partners and the documents of the Registered Office of the LLP.
Promoter Document
- Colour Photo
- PAN & Aadhar
- Id Proof: (Passport, Voter ID, Driving License, Aadhar)
- Address Proof: (Bank Statement or any utility bill like electricity, water or telephone bill. The address proof should not be older than 2 months)
Registered Address Related
- Proof of Address: (Latest Utility bill of that address such as electricity bill, water bill or Property Ownership Papers)
- NOC: No Objection Certificate from the owner.
LLP Registration Process in India
Adequate and accurate documentation is key to the registration of LLP. The application for LLP Registration is filed with certain supporting documents, which include the KYC documents of all the partners and the authorised designated partners, along with the documents of the Registered Office validating its address and asserting that the owner of the premises has no objection against the office of LLP being opened on his property. Also, since the application is available in digital format, it has to be signed using a digital signature. So, the DSCs of all partners must also be obtained before filing the application. All these documents must be submitted in their correct formats and must contain up-to-date information. So we advise that before you begin the LLP registration process of application, arrange for all the necessary documents to be attached with it, to avoid any hindrance in the later stages.
The name of your LLP should not only be practically viable but also in compliance with the necessary guidelines prescribed by laws like the Companies Act, the Trademark Act, and the Names & Emblems Act. We have briefly discussed these guidelines in the above section. By following these guidelines, once you have selected an appropriate name, you are required to reserve it for your LLP with the Registrar, CRC. For this purpose, you can either use the FiLLiP application or the RUN (Reserve Unique Name) form, both available on the MCA website. You can submit the proposed names in these applications, which will be examined by the Registrar. If found to be legally valid and available for your use, the concerned name will be reserved for your LLP. Since we are of the view that you should reserve the name of your LLP before applying for LLP incorporation, we advise you to use the RUN form.
The application form for LLP registration, FiLLiP, can be found on the official website of the Ministry of Corporate Affairs. Once you access the application, you can fill in all the details online and upload scanned, self-attested copies of all the necessary documents. Refer to the table in the above section to know what these necessary documents are. Once all the details are filled in, and all the documents are uploaded, the authorised designated partner will have to sign the application using his digital signature certificate. You can finally proceed to submit the application after paying the prescribed government fees.
The submitted application reaches the Registrar of Companies, an office under the Ministry of Corporate Affairs. The ROC examines the application thoroughly and verifies every bit of information mentioned in the application and the documents. If any error is found, the ROC rejects the application entirely. In this case, the applicant LLP will again have to file a fresh application for registration. However, if the application is found to be free from errors, the ROC approves it and registers the LLP. As conclusive proof of such registration, the ROC will issue a Certificate of Registration in the name of the LLP. Other than the Registration Certificate, the applicant LLP receives the following documents.
Compliances of Limited Liability Partnership (LLP)
Compared to companies, an LLP has an extremely low number of compliances, as prescribed under the LLP Act of 2008. However, fulfilling these compliances are not only necessary but are also required to encourage transparency, governance and protect the interests of all stakeholders, such as ROC, Partners, Designated Partners, Investors and Tax Departments. You can divide these compliances into four different categories, namely One Time Post Incorporation, annual, event-based, and regular compliances. We will discuss the one-time and annual compliances of LLP here; for detailed information about the rest, you can talk to our expert startup advisors.
ONE TIME: Post Incorporation Compliances & Local Registrations immediately after Incorporation;
REGULAR: Regular Compliances, such as Accounting, Tax Filing and Maintenance of Records & Registers;
EVENT BASED: The compliance filing on change of director, registered address or on allotment of shares, etc.
ANNUAL COMPLIANCE: At the end of the financial year, the financial statement, ITR and ROC Annual Return Filing.
ONE TIME COMPLIANCE
The LLP Agreement is the constitutional document of an LLP, which contains all the terms and conditions mutually agreed upon by its partners. The document is drafted on Stamp paper, signed by all the partners of the LLP, stamped and notarised by a public notary. The Agreement is not required to be submitted to the ROC during incorporation. However, within 30 days from the incorporation date, the LLP Agreement must be filed to the ROC in e-Form 3.
ANNUAL COMPLIANCE
| S.No | Compliances | Due Dates |
|---|---|---|
1. | ROC Annual Returns (Form 11) | The Annual Returns of a particular year will be filed on or before 30th May of the next financial year. If the annual turnover of the LLP crosses Rs.5 crores or the capital contribution crosses Rs.50 lakhs in a financial year, the returns for that year must be certified by a practising Company Secretary. |
2. | Financial Statements (Form 8) | The Financial Statements of a particular year will be filed on or before 30th October of the next financial year. The financial statements will have to be audited by a practising Chartered Accountant only for financial years in which the annual turnover exceeds Rs.40 lakhs or the capital contribution exceeds Rs.25 lakhs. |
3. | Statement of Solvency (Form 8) | The Statement of Solvency of a particular year will be filed on or before 30th October of the next financial year |
4. | Income Tax Returns | The Income Tax Returns of a particular year will be filed on or before 31st July of the next financial year if tax audit is not applicable. If tax audit is applicable, then ITR would be filed on or before 30th September |
How to Close an LLP?
An LLP is a creation of law and hence can be closed under the same that created it, i.e. the Limited Liability Partnership Act of 2008. But before you proceed with closure of your LLP, you must first determine whether it is functional or defunct/inactive. Based on this status, you will be able to choose the method by which you can close your LLP. Read this blog to know how to Strike Off an Inactive LLP.