About Limited Liability Partnership (LLP)

Limited Liability Partnership is such form of  business where 2 or more people come together to form Partnership for doing a business. Limited Liability Partnership is also populary known as LLP and it also enjoy the benefit of separate legal identity which is not available in normal partnership. In this form of business the liability of Partners is Limited, in other words  Partners are liable to pay to the extent of the money they have contributed to start the LLP. Each Partner in LLP is responsible for their own act and cannot be made liable for the misconduct or negligence of other Partner.

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Register my Limited Liability Partnership (LLP)

Our Professional Fees : INR 5,999/-

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Our scope of work

    1. Any amount of Capital;

    2. Application for 2 Director Identification Numbers;

    3. Application of 2 Digital Signatures (validity 2 years) (Class 3 DSC);

    4. Name Approval;

    5. Drafting of LLP Agreement;

    6. Drafting of other additional documents;

    7. Preparation of various eforms;

    8. Resubmission of eforms, if any;

    9. Obtaining Certificate of Incorporation from Registrar

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Know more about Limited Liability Partnership (LLP)

A limited liability partnership which is also populary known as LLP is a Business Entity that is distinct from its Partners and/or Designated Partners and enjoys the benefit of continuous succession and limited financial obligation. It should have a minimum of 2 Designated Partners. The word 'Limited Liability  denotes that the Liability of the Designated Partners and normal Partners is restricted. It is also one of the most popular type of business structure for those who wants to enjoy the benefits of incorporated entity with normal Partnership Firm.

1. Who are Designated Partner and how many Designated Partners are in Limited Liability Partnership (LLP)?

  • Minimum no. of DP required are 2 out of which 1 shall be Indian Resident.

  • Any person can be a DP of the LLP including family members.

  • Director Identification No. (DIN) and Digital Signature Certificate (DSC) are required to be a DP of the LLP.

  • DP are the managers and they are responsible for day to day functioning of the LLP.

  • DP can also contribute to capital of the LLP.

2. What is the difference between Partners and Designated Partners in Limited Liability Partnership (LLP)?

  • There is no such minimum requirement for a Partner.

  • DP and Partners can be the same.

  • Partners only contribute to capital of the LLP and does not take active participation in the day to day functioning of LLP, hence they are not responsible or liable for any activities of the LLP.

3. What is minimum Capital required to start the Limited Liability Partnership (LLP)?

  • There is no such requirement for minimum capital contribution, hence the LLP can be formed with the capital contribution starting from INR 1.

4. What is Registered Office of the Limited Liability Partnership (LLP)?:

  • Any place can be made as the registered office of the LLP even the residential place can be used as the registered office of the LLP.

5. Who is the Registering Authority of the Limited Liability Partnership (LLP)?:

  • Ministry of Corporate Affairs

6. What are the documents required for the formation of Limited Liability Partnership (LLP)?

 > Proof of Registered office address (Conveyance/ Lease deed/Rent Agreement/Maintenance Bill)

 > Copy of the utility bills of the registered office (Electricity Bill/Telephone Bill not older than two months)

 

    Designated Partners / Partners

 > PAN Mandatory- Indian National / Passport – Foreign National – Self Attested

 > Proof of Identity – Voter Id/Passport/Driving License – Self Attested

 > Proof of Address (Electricity Bill/Bank Statement/Telephone Bill/Mobile Bill not older than 2 months) – Self Attested

 

Obtain DSC (Digital Signature Certificate)

01

Application for the Name approval through LLP-RUN on MCA Portal

02

Prepare e-form FILLIP (allotment of DIN, reservation of name and Incorporation)

03

Filing of e-form FILLIP with require attachment with RoC (Registrar of Companies)

04

Drafting of Partnership Agreement

05

File Partnership Agreement with e-form 3 within 30 days of incorporation

06

Verification of documents / forms by RoC

07

Issue of Certificate of Incorporation by RoC

08

Advantages

It is easy to start and manage a business like entrepreneurs. LLP agreements are customized in according to meet the needs of partners concerned. There is fewer formalities in areas of legal compilation, annual meeting and resolution as compared to any other Private Limited Company.
LLP can be started with the minimum amount of capital money. Capital may be in the form of tangible, movable asset like Land, machinery or intangible form.
LLP may have partners varying from 2 to many. There is no limit for partners in LLP.
The cost of registration of LLP is low as compared to Public and Private Limited entity.
LLP is required to audit their account in the following situation: When the contributions of the LLP exceeds Rs. 25 Lakhs, or When annual turnover of the LLP exceeds Rs. 40 Lakhs
LLP have to face less compliance burden as they have to submit only two statements i.e. the Annual Return & Statement of Accounts and Solvency. Whereas in the case of private company, at Least 8 to 10 regulatory formalities and compliances are required to be duly completed

Disadvantages

LLP is regulated form of business, as the LLP Act 2008 provides various provisions relating to management of affairs of the LLP which includes taking the permission of regulatory authority for undertaking certain actions.
It is necessary for LLP to get its accounts audited annually and to prepare its balance sheet and profit and loss account in accordance with the prescribed guidelines. Lot of information as to the financial condition of the business is required to be disclosed and moreover, all such documents are available for public inspection, therefore it is not possible to maintain financial secrecy of the business.
It is generally not easy to close the LLP as compared to other forms of business, the procedure to close is long and involves compliance of various formalities, at times it takes 4-5 months to completely wind-up the LLP.
It is not easy to transfer the interest in LLP as compared to company; various formalities are required to comply with in accordance with the terms and conditions of the LLP Agreement.
LLP is governed by the terms and conditions as prescribed in the LLP Agreement and which if not properly drafted will result in disputed among the partners , delay in executing decision, requirement of amending the Agreement or executing a new one, in case the new partners are admitted.
LLP is recently introduced in India and is therefore not recognized under various laws for the purpose of carrying various business and moreover due to being relatively new concept , there is still no clarity on various issues related to it , which might create problems in its smooth functioning.
Factors of Comparison Private Company Public One Person Company Limited Liability Partnership Partnership Sole Proprietorship
Capital Min: INR 1 & Max:No Limit Min: INR 1 & Max:No Limit Min: INR 1 & Max:2 Crore Min: INR 1 & Max:No Limit Min: INR 1 & Max:No Limit Min: INR 1 & Max:No Limit
Director Minimum 2 Minimum 3 Minimum 1 - - -
Shareholder Minimum 2 Minimum 7 Minimum 1 - - -
Designated Partner/Parter - - - Minimum 2 Minimum 2 -
Taxation 30%(25% if turnover does not exceed 250 Crore) 30%(25% if turnover does not exceed 250 Crore) 30% 30% 30% As per Slab Rates
Statutory Audit Compulsory Compulsory Compulsory If Contribution exceed INR 25 Lacs; If Turnover exceed INR 40 Lacs Not Required Not Required
Investor Preference High Low Low Medium Very Low Very Low
Compliance Cost Mdeium High Low Low Low Low
Regulator Registrar of Companies SEBI/Registrar of Companies Registrar of Companies Registrar of Companies Registrar of Firms -
Time take for Registration 5-7 working days 5-7 working days 5-7 working days 20-25 working days 10-12 working days 5-7 working days