LIMITED LIABILITY PARTNERSHIP (LLP)
Overview and Incorporation
Limited Liability
Partnership is form of business having status of both partnership and Corporate.
It is registered under LLP Act, 2008 and rules made there under.
Pros of LLP:
·
LLP can be formed
by any amount of capital. There is no need for minimum capital for LLP.
·
It requires a
minimum of 2 partners and there is no limit on the maximum number of partners
of the LLP.
·
The cost of
registering LLP is low as compared to a company.
·
All limited
companies have to get their accounts audited but in case of LLP, there is no
such requirement. Although it is required to audit when the contributions of
LLP exceeds Rs.25 lakh or Annual turnover exceeds Rs.40 lakh.
·
No need to
maintain registers.
·
There is no
requirements of holding Board and General Meetings.
·
The LLP has to
file only two forms every year i.e. Annual return and Statement of accounts and
solvency.
·
LLP is treated in
par with the partnership firm. The provision of Dividend Distribution Tax (DDT)
is not payable on LLP. Also under Section 40(b) deductions are allowed on the
interest given to partners, any payment of salary, bonus, commission or
remuneration.
·
Compliance level
is so low.
Cons of LLP:
·
LLP can be bind
by the act of one partner without the other partner i.e. one partner can make
all other liable or bind them.
·
They cannot raise
money from public.
PROCESS OF REGISTRATION OF LLP
Step 1: Obtain DSC
Step 2: Apply for DIN
Step 3: Name Approval
Step 4: Incorporation of LLP
Step 5: File LLP Agreement
Step 1: Digital Signature Certificate (DSC)
Before initiating the process of
registration, the designated partners of the proposed LLP have to apply for DSC.
This is because all the documents for LLP are filed online and are required to
be digitally signed.
Step 2: Director Identification Number (DIN)
The Designated Partners have to
apply for the DIN.
The application for allotment of
DIN has to be made in Form DIR- 3. You have to attach the scanned copy of
documents (usually Aadhaar and PAN) to the form.
At least one designated partner
must be Indian resident.
Step 3: Reservation of Name
Form 1 is filed for the
reservation of name of proposed LLP. But before quoting the name in the form,
it is recommended that you use the free name search facility on MCA
portal. The system will provide the list of closely resembling names of
existing LLPs based on the search criteria filled up. This will help you in
choosing names not similar to already existing names. You need to provide six
names in the order of preference in Form 1 with the significance of the
proposed name.
The registrar will approve the
name only if the name is not undesirable in the opinion of the Central Government
and does not resemble any existing partnership firm or an LLP or a body
corporate or a trademark.
Step 4: Incorporation of LLP
Form 2 is the application form for
the incorporation of the LLP. You must keep in mind following points while
filing Form 2.
- All the details in the form 2 must be
filed with the relevant attachment and filled correctly like – total
number of partners and designated partners, amount of partner’s
contribution, etc.
- You have to pay the prescribed
registration fee based on the contribution of partners in the proposed
LLP.
- The form must be digitally signed by a
person named in the incorporation document as a designated partner having
DIN and professional involved in incorporation of LLP.
- On the submission of the form, if the registrar
is satisfied, they will register the proposed LLP.
- It takes 10-20 days for the registration
of LLP subject to government processing time and submission of necessary
documents.
Step 5: File Limited Liability Partnership
Agreement
LLP agreement governs the mutual
rights and duties amongst the partners and also between the LLP and its
partners.
Form 3 for LLP agreement has to be
filed within 30 days of the date of incorporation.
The LLP Agreement has to be
printed on Stamp Paper. The value of Stamp Paper is different for every state.
DOCUMENTS REQUIRED TO REGISTER LLP
Here is a list of documents
required for registration:
- PAN Card of
the Partners. It is mandatory.
- ID Proof of
the partners i.e. Voter ID/Passport/Licence/Aadhar, etc.
- Residence
Proof of Partners i.e. Bank Statement/Mobile Bill/Electricity Bill/Gas
Bill not older than 2 months, etc.
- Photograph
- Passport (in
case of Foreign Nationals/ NRIs)
- Proof of
Registered Office Address i.e. Mobile Bill/Electricity Bill/Gas Bill not
older than 2 months, etc.
- Digital
Signature Certificate (DSC) of Designated Partners
- Email id,
Mobile Number and Place of Birth of Partners.
- Capital
Contribution, Profit sharing ratio, Object of the LLP etc.
TIME INVOLVED
IN THE REGISTRATION PROCESS
LLP formation starting from
obtaining DSC to Filing Form 3 takes approximately 10-20 days subject to availability
of all the documents and government processing time.
Contact Details:
VISHAL SHARMA
Company Secretary
Mob: 9716763754
Email: csvishalpbs@gmail.com
FOR
MORE ARTICLES VISIT TO:
http://csvishalsharma.blogspot.in/
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Disclaimer: The Content is prepared on the basis of our general understanding and on the basis of relevant provision of Companies Act, 2013 read with rules made there under. The whole content is only for the knowledge sharing purpose, we do not take any responsibility for the correctness of the same.
Disclaimer: The Content is prepared on the basis of our general understanding and on the basis of relevant provision of Companies Act, 2013 read with rules made there under. The whole content is only for the knowledge sharing purpose, we do not take any responsibility for the correctness of the same.
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