OVERVIEW

Limited Liability Partnership (LLP) is a balanced structure, carrying benefits conventional partnership and still limiting personal liabilities of the partners. It is regulated as a contractual agreement between the partners under the Limited Liability Partnership Act, 2008. It has quickly become a popular choice for services and professional firms like Chartered Accountants, recruiting firms, consulting businesses, etc.

LLP as Compared to Private Limited
LLPs are similar to Private Limited Companies with respect to compliance and operational requirements. Recognized as a separate legal entity than the partners, it can contract or involve in any legal proceedings in its own name. That enables the partners of an LLP to separate business liabilities or debts being recovered from their personal assets. Compliance requirement here is greater than regular partnership firms. However, Compared to a private limited company structure, it is easier to incorporate and maintain.

As a drawback, ownership transfer of a Limited Liability Partnership is not as easy as of a company. Neither an LLP can issue ESOP. For the reason, LLP is not the most ideal choice for startups who want to hyper-grow, seek seed investor or venture capital funding, or issue share capital to its employees.

Registration of LLP is Simple with TaxProbe
The process of LLP Registration in India is revamped by the Ministry of Corporate Affairs. A quicker process of LLP incorporation is made available on 2nd October 2018 as part of the ease of doing business initiative by the government.

Limited Liability of Partners

Because an LLP can enter into a contractual relationship in its own capacity, it offers a great advantage to the partners for limiting their personal risk. Liability of financial contribution of any partner is restricted to the capital contribution as per the LLP agreement. Many new age businesses prefer LLP registration over partnership so that their personal assets remain safe in case of loss, or even insolvency. Further, one partner is not held responsible for the actions of negligence or misconduct of any other partner.

Operational Flexibility

LLP Agreement, deed among partners of an LLP, clarifies operating structure including rights and responsibilities of the partners. Typically, LLP would select a “Designated Member” who would control day-to-day operations. It can have individuals or existing businesses as members. Further, this structure allows to clearly define roles of the partners and their respective responsibilities. It could also help in protecting partner’s interest in case of loss because of an unlawful act of any other partner.

Separate Legal Existence

Registration of LLP creates a separate legal identity than its partners. Governed by the LLP Act of 2008, it allows the business to contract with other entities, take legal action, own assets and borrow funds in the name of an LLP itself. It is a major advantage that is not available to a regular partnership firm

Lower Compliance Requirement

A key benefit of registering an LLP over a private company is lesser compliance requirement. It doesn’t have a mandatory audit requirement until a certain level of turnover or contribution. Unlike companies, compliances related to board meetings, statutory meetings, etc. do not apply to LLPs. Professional services for compliance are typically available at cheaper rates than that for companies, making it cost effective to maintain an LLP.

PAN Card

PAN Card of all partners
Foreign nationals may provide passport

Partners Address Proof
Aadhar Card/ Voter ID/ Passport/ Driving License of all partners

Photograph
Latest Passport size photograph of all partners

Business Address Proof
Latest Electricity Bill/ Telephone Bill of the registered office address

NOC from owner
No Objection Certificate to be obtained from the owner of registered office

Rent Agreement
Rent Agreement of the registered office should be provided, if any

Note
In case of NRI or Foreign National, documents of the partner must be notarized or apostilled

Day 1 – 2
Application for Digital Signature Certificate

Day 3 – 5
Checking LLP Name availability
Application for Name Reservation under “LLP-RUN”
Reservation of LLP Name

Day 6 – 10
Drafting the LLP incorporation document
Filing application for LLP registration
Application for DIN allotment of Designated Partners
Certificate of LLP Incorporation

Day 11 – 14
Application for PAN and TAN of LLP
Drafting of LLP Agreement

Day 15 – 18
Payment of Stamp Duty
Filing of LLP Agreement
Government processing time