Limited Liability Partnership

How​ ​can​ ​you​ ​set​ ​up​ ​a​ ​Limited​ ​Liability​ ​Partnership​ ​in​ ​India?

Starting out alone on a life adventure can sometimes turn out to be risky business, and hence we need partners to get a second perspective on various aspects. Partners will always be there to lend a helping hand in times of need and celebration. In business too, we can find similar patterns.

Limited Liability Partnership (LLP) is a newly introduced corporate entity type in India aimed at entrepreneurs, small and medium sized businesses. An LLP provides many benefits of a Private Limited Company and at the same time it is easier to maintain compliance. Low registration fee and easy maintenance make LLP a first choice for many of the small businesses in India. 

Limited​ ​Liability​ ​Partnership​ ​(LLP)

Limited Liability Partnerships, LLP is a unique and new form of business that combines the advantages of both 'Company' and 'Partnership' in a single business entity. This was introduced in India in 2008 with the approval of the Limited Liability Partnership Act, 2008.

LLP is a superior type of partnership. A normal partnership is often discouraged due to its unlimited liability feature, i.e. your personal assets may be seized in case all the dues are not cleared. To counter this problem, an important feature of limited liability of company was added to the partnership, resulting in Limited Liability Partnership.

LLP is a separate legal entity, which can be formed in India by a minimum of two persons coming together with a motive of earning profit. Unlike a Private Ltd Company, an LLP is easy to manage and it is subjected to minimal post registration compliances.

Basic​ ​requirements​ ​for​ ​LLP​ ​Formation

1. A minimum of 2 Partners are necessary.

2. If a corporate body is a Partner, it has to nominate a natural person as its Nominee.

3. No concept of share capital exists, but each Partner has to contribute towards LLP capital.

4. DIN (Director Identification Number) mandatory for all the Designated Partners.

5. DSC (Digital Signature Certificate) mandatory for all the Designated Partners.

6. Address proof for office of LLP is required.

Benefits of Limited Liability Partnership

Easy​ ​to​ ​form

Compared to companies, it is very easy to set up an LLP as the process is quite simple and requires far lesser hassles.

Tax​ ​Advantages

One of the benefits of operating underneath an LLP is how you file taxes. The partnership doesn’t have to file taxes as a business, and this provides a great relief for the company. For example, Dividend Distribution Tax and tax surcharge don't apply and loans to partners are also not taxable as income.

Greater​ ​Flexibility

Each partner in the business has the ability to decide how much they want to contribute and how much of a partner they truly want to be in the business. They are also not obligated to participate in business meetings or consultations with anyone that they do not feel the need to.

No​ ​requirement​ ​of​ ​minimum​ ​capital​ ​contribution

Where the minimum capital contribution in a private limited company is Rs.1,00,000 and in a public company is Rs.5,00,000, there is no such mandate in an LLP structure. Moreover, the contribution of a partner can include tangible or intangible, movable or immovable property to the Limited Liabilities Partnership.

As​ ​many​ ​owners​ ​as​ ​required

One of the best advantages of a limited liability partnership is that there is no limit to the number of owners that can be appointed in the business. This is a wonderful aspect as it evenly spreads out the amount of liability that each partner can have if something goes wrong with the business.

Much​ ​Less​ ​Liability

As the name implies, a limited liability partnership limits your liability. Since there are many owners involved in the business all the risks of the business are spread out and reduced significantly than if a single person was responsible for the business on his own. This usually is in reference to legal issues, like if the company was sued by anyone for any reason.

No​ ​mandate​ ​of​ ​Audit

All limited companies, private or public, are required to get their accounts audited. But there is no such mandatory requirement in case of an LLP. This is ascertained as a remarkable compliance benefit. However, a Limited Liability Partnership is required to get their books audited only in the case if :- ● The contributions of the LLP exceeds Rs. 25 Lakhs,​ ​or ● The annual turnover of the LLP exceeds Rs. 40 Lakhs

Necessary​ ​Documents​ ​for​ ​LLP​ ​registration

PAN Card

PAN card of each Partner.
(Valid and should Correspond with Id/Address proof)

Identity Proof

Identity Proof of each Partner - Aadhaar Card/Voter ID Card/Driving License

Address Proof

Residence proof of each Partner - Utility Bills such as Electricity/Telephone/Bank Statement (not older than 2 months).

Registered Office Address Proof

Address proof of the Registered Address of Entity - Rent Agreement and Utility Bill of same address in name of landlord - NOC from the landlord/partner.

RS. 9,999/-
RS. 4,999/- (All Inclusive)

Get Started

* The above mentioned cost is based on calculation of Rs. 1lakh as minimum contribution. Price will change on increasing the contribution and state stamp duty. Currently LLP can be incorporated, if you have DIN already. new DIN allotment is on hold from Government

Question? Call us 8447037100

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Check out what's in the kit for you.

  •   Incorporation Certificate
  •   LLP Agreement
  •   LLP PAN Card
  •   LLP TAN/TDS Number
  •   Digital Signature for 2 Partners
  •   Bank Account Opening Assistance
  •   Accounting Software Assistance

RS. 9,999/-
RS. 4,999/- (All Inclusive)

Get Started

* The above mentioned cost is based on calculation of Rs. 1lakh as minimum contribution. Price will change on increasing the contribution and state stamp duty. Currently LLP can be incorporated, if you have DIN already. new DIN allotment is on hold from Government

Question? Call us 8447037100

​Registration​ ​Process

STEP​ ​1:​ ​DPIN​ ​APPLICATION

Designated Partner Identification Number (DPIN) is necessary for the two proposed designated partners, and it requires the following: passport-sized photograph, a scanned copy of either the telephone bill, driver’s license or previous two months bank statement, soft copy of the PAN card and a completely filled form. If the partner is a non-resident Indian, then a copy of the passport will replace the PAN card. The passport copy and address proof should be notarised by the Indian embassy, a foreign public notary or company secretary in full-time employment.

STEP​ ​2:​ ​DSC​ ​APPLICATION

Along with DPIN, you can apply for the DSC (Digital Signature Certificate) ​for the two designated partners. The documents you need for this are the same as those you need for DPIN, along with the e-form.

STEP​ ​3:​ ​NAME​ ​RESERVATION

To reserve the name of your LLP, you need to fill the e form 1 available on llp.gov.in. You also need to provide the main objectives of your business and the significance of the chosen name. You may check for its availability for free online. Keep in mind a few points while reserving a name for your LLP: a) Your name must be unique, at least in the sector in which you operate. b) There cannot be another entity by the same name. (You can verify this by running a search for free) c) You must include the business activity in your name. d) Abbreviations, adjectives and generic words are rejected, as are the words bank, exchange and stock exchange (unless you have the approval or RBI or SEBI).

STEP​ ​4:​ ​DOCUMENT​ ​VERIFICATION​ ​&​ ​APPROVAL

The documents filed for name reservation are examined, and, if approved, you can file the incorporation documents and subscription statement in e-form 2. This must be done within 60 days of name approval. If e-form 2 is accepted, you will receive the certificate of incorporation. But you’re still not done, within 30 days from the receipt of incorporation certificate, you will need to file the LLP Agreement Form-3. The government will verify this and, if satisfied, approve your LLP Agreement.

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