Limited Liability Partnership (LLP)

Introduction
The advent of LLP lead to abrasion of incorporation of partnership firms in India as LLP is a hybrid of company as well as partnership. It exhibits characteristics of both of them. We at MAS exhibit all steps necessary for incorporating and registering LLP as per the provisions of Limited Liability Partnership Act, 2008. Quality services are what we aim for and deliver the same on time.

One of the crucial reasons for registering as LLP is the aspect of limited liability. This concept is entirely different from proprietorship as well as partnership where personal assets of the directors or partners are attached in case of bankruptcy of business.

Characteristics of LLP

• Separate legal entity

• LLP is a legal entity separate and distinct from its owners. Partners can sue each other in case any such situation arises.
• It has perpetual succession i.e., members may come and go but the business remains.
• All the members have to mutually agree on dissolution of the firm by executing a term of dissolution.

• Suitability

• Registering as LLP is beneficial for startups as well as small businesses having capital below
  INR 25 lakhs and turnover less than INR 40 lakhs per year because of non-requirement of undergoing any formal audits.
• LLP is recognized as an artificial juristic person hence, can acquire property in its own name. Members of LLP cannot claim the property acquired in the name of LLP as theirs.

• Management distinction:
  Partners who constitute LLP are the owners and manage the business of the said LLP. This is different from private limited company, whose directors may be different from shareholders. This is one of the main reasons why venture capitals resist investing in LLP.
  

General requirements for registering LLP in India
Following are few specific requirements necessary to be filed by any form of business to be eligible for registering as LLP in India:

• Minimum two partners. No limit to maximum number of partners.
• In case partner is a body corporate, a natural person should be the nominee.
• No requirement of share capital, however, each partner has to contribute some proportion.
• No minimum capital is required in LLP.
• At least one designated partner should be Indian resident.
• DPIN for all designated partners.
• DSC for all designated partners.
• Address proof of office of LLP. Registered office need not necessarily be a commercial space.
• In case of rented space, non-objection certificate (NOC) from the landlord to be obtained.
  

Process of registering as LLP in India

• Name approval
  Registration of LLP can only be done once the name is approved by the Registrar. Registrar will approve the name provided that it should not resemble the name of already registered entity. All the names already registered can be checked on the search facility of MCA portal.
• Application for incorporation
  For incorporation of LLP, application is filed in Form FiLLiP Earlier if a Person wants to incorporate LLP then it has to apply for the DIN, Approval for the Name Availability, Separate form was required for registered office address, etc. But now this form act as a single window for LLP incorporation. This form can be used for the Application of DIN, Application for Availability of Name, No need to file separate form for address of registered office
• Incorporation certificate
  On approval of incorporation form by the Registrar, the LLP Incorporation Certificate is issued.
• Application for PAN, TAN and bank account
  Subsequent to getting certificate of incorporation, application for PAN and TAN of the entity has to be made with National Securities Depository Limited (NSDL). Approximately three weeks’ time is taken to obtain PAN and TAN of the firm.
• Executing LLP agreement
  LLP agreement is mandatorily required in LLP as it defines the mutual rights and obligations of all the partners as well as between the LLP and partners. LLP agreement is executed upon LLP registration by filing Form 3 online on MCA portal. This process has to be done within 30 days of date of incorporation.
  

Documents required for registering LLP
Following are the documents that are to be submitted by partners:

• In case of foreign nationals and non-resident Indians (NRIs), scanned copy of PAN or passport
• In case of Indian residents, scanned copy of Aadhar card / voter’s ID / passport / driver’s license
• Scanned copy of latest bank statement or any utility bill like telephone bill / mobile bill / electricity bill / gas bill for all
• Scanned passport-size photograph
• specimen signature (blank document with signature by partners only)
  

Note: Every partner must self-attest the initial three documents. In the case of foreign nationals and NRIs, all the documents must be notarized and attested by embassy if currently in India or in a non-commonwealth country and apostilled if in a commonwealth country.

Following documents are required to be submitted with regard to registered office:

• copy of latest telephone or mobile bill/electricity or gas Bill/ bank statement
• copy of notarized Rental Agreement in English
• copy of No-objection Certificate from the owner of the rented property
• copy of Sale Deed/Property Deed in English (in case of self-owned property)
  

Note: Registered office need not necessarily be commercial space, it could be residential property as well.

Services that we provide in helping our clients in LLP incorporation and for adhering to compliances post incorporation:

• Obtaining designated partners identification number (DPIN) for partners
• Acquiring digital signature certificate (DSC) for partners
• Name search and approval from Registrar
• Preparation and execution of LLP agreement
• Permanent account number (PAN) and tax deduction and collection at source account number (TAN) acquisition
• Assistance in opening bank account
• Goods and services tax (GST) registration
• Taxation and other regulatory services
• Auditing services
• Payroll processing