LLP Registrations & Its Compliance
What Is A (Limited Liability Patnership) LLP?
A Limited Liability Partnership (LLP) is a hybrid business structure combining the flexibility of a traditional partnership with the limited liability protection of a company. Partners are not personally liable for business debts, safeguarding personal assets. Commonly used by professional service firms (lawyers, accountants) and small-to-medium businesses, it operates as a separate legal entity.
ADVANTAGES OF LLP
Separate Legal Entity
LLP is a body corporate formed and incorporated under this Act and is a legal entity that it separate from that of its partners. The LLP is liable to the full extent of its assets but liability of its partners is limited to the extent of their agreed contribution in the LLP.
Limited Liability
Every partner of LLP is, for the purpose of LLP, the agent of LLP, but not of others partners. The liability of the partners will be limited to their agreed contribution in the LLP.
Perpetual Succession
The LLP can continue its existence irrespective of changes in partners. Death, insanity, retirement or insolvency of partners does not impact its existence. It has capacity of entering into contracts and holding property in its own name.
No Minimum Capital Requirement
There is no requirement to have a minimum paid-up capital before incorporation. It doesn’t required any specific amount for capital contribution by the partners.
No maximum limit to the Partners
There is no maximum limit to the partners in an LLP, so multiple partners and contributors can operate under one LLP.
LLP Agreement
The LLP Act, 2008 provides flexibility to partners to devise the agreement as per their choice.
Conversion Into LLP
A firm, private company and unlisted public company would be allowed to converted into the LLP in accordance with the provisions of LLP Act, 2008.
DOCUMENTS REQUIRED FOR LLP RESGISTRATION
For Indian Nationals
- PAN Card – It is mandatory to provide a copy of the PAN card. This is the primary document used to confirm identity. The name should match all other documents.
- Address Proof – An official address proof is required. The document must be in the same name as PAN and show the partner’s current address. It must not be older than 2 months.
-
Residential Proof – Any one of the following documents (not older than 2 months):
- Bank Statement
- Electricity Bill
- Telephone Bill or Mobile Bill
For Foreign Nationals
- Passport – A copy of a valid passport is required as the main identity proof.
- Photograph – A recent passport-size photograph of the partner.
-
Address Proof – An official address proof (not older than 2 months). Accepted documents include:
- Bank Statement
- Utility Bill
- Residence Proof issued by Government
- Notarization – All documents must be duly notarized in the country of origin.
PROCEDURE FOR LLP REGISTRATION
- Obtain Digital signature certificate (DSC) - Since all documents are submitted electronically, all designated partner must have a DSC for digitally signing documents.
- Obtain DPIN - File Designated Partner Identification Number (DPIN) application for all designated partner in the FORM DIR-3. Attachment of scanned document copy to the form. The form should also be signed by a Company Secretary, Chartered Accountant or Cost Accountant in full-time practice Designated Partner of an LLP must be a natural person.
- Name Reservation - File RUN-LLP (Reserve Unique Name-Limited Liability Partnership) for reservation of name of the proposed LLP. Reserved name is valid for 3 months.
- Incorporate the LLP (FiLLiP) - Submit the FORM for incorporation is FiLLiP (Form for incorporation of Limited Liability Partnership) which shall be filed with the Registrar who has jurisdiction over the state in which the registered office of the LLP is situated.
- File the LLP Agreement – LLP agreement must be filled in the FORM-3 online on MCA PORTAL within 30 days of the date of the incorporation. The LLP agreement has to be printed on stamp paper.
COMPLIANCES OF LLP -ANNUAL E-FORMS:
FORM-8
Statement of Account and Solvency form shall be filed by every LLP with registrar on 30th October every year. It provides a declaration about solvency status and declares financial position of the company.
FORM-11
Annual Return required to be filed by LLP with ROC within 60 days of the closer of financial year. Due date of filings of form on 30th May
INCOME TAX RETURN
Filings of document and tax details on
31st July [if not audit is required]
30th September / 31st October [if audit applicable]
AUDIT REQUIREMENT
Audit is not mandatory for the LLP. However, it is mandatory on fulfilling the following criteria:
If Turnover exceeds Rs. 40 lacs.
Its contribution exceeds Rs. 25 lacs.
LLP Forms
| Form Name | Purpose of the Form |
|---|---|
| FiLLiP | Incorporation Form of LLP |
| RUN LLP | Form for Reserving a Name for the LLP |
| FORM-3 | Information about LLP Agreement |
| FORM-8 | Statement of Account and Solvency |
| FORM-11 | Annual Return of LLP |
| FORM-24 | Application for Striking Off Name of LLP |