LLP registration in India
The Limited liability Partnership is a form of business which involves two or more people in and the profit is shared among them. This type of business was introduced in india in the 2009 with the aim to promote businesses and improving employment rates. Henceforth, it has become a popular form of business for the 9009 with the aim to promote businesses and improving employment rates. Henceforth, it has become a popular form of business for the start-ups and small businesses. The LLP offers all the advantages of partnership firm with the limitations of Liability Company. The registration process for Limited liability partnership is governed under the Limited Liability Partnership Act, 2008. This a very successful and prominent form of business as it is easy to manage and assists owners with limited liability.
Why register an LLP company? - Benefits
The most vital reason for registering as LLP is the limited liability. The members of the firm are only liable for a small amount of debt incurred by it. This is entirely different from proprietorship and partnership where the personal assets of directors and partners are not protected if the business becomes bankrupt.
There are numerous advantages of creating an LLP company. The most important one is the limited liability of the company. Hence, the members of the firm will be only liable for a small amount of debt incurred. This is very different from the proprietorship as in this the personal assets of the partners is not affected in case of bankruptcy. Some of the highlighted advantages are:
Seperate Legal Entity:
The LLP is a separate legal entity from the partners. It has its own succession values such that even of the partners leave, the business remains functinal. Also, the the partners can sue one another in a problematic situation.
Flexible Agreement:
The ownership of the LLP firm is easily transferrable with the induction of a new person as partner. Thus, the ownership is transferred to that person.
Suitable For Small Business:
The LLPs having a capital amount less than 25 lakhs and turnover below 40 lakhs per year are not liable for formal audits. This makes registration of LLP beneficial for small businesses and startups.
Own Property
An LLP has the advantage of 0wning property, because it is recognized as a legal entity. Partners of LLP have no right to claim the property as theirs.
No Owner /manager Distinction:
An LLP comprises partners, who own and manage the entire business.
Steps to register LLP in India -
Step 1: Obtaining DSC And DIN
The first step is to obtain DSC of the all the partners of the Limited Liability Partnership . As all the forms submission is done online, there is need of the directors' digital signatures.
All directors have to file for a DIN number by applying for the Form DIR- 3.
Step 2: Application For Name Approval
For the registration of a LLP it is important to file for the approval of the name of the company. But, before that you need to ensure that the name is not already taken. You can check easily on the MCA portal. The registrar would not approve the LLP names that are taken already.
The approval of the name is done by the Registrar. But make sure it should not hold any resemblance to the existing partnership firms, LLPs, trademarks, or body corporate.
Step 3: LLP Agreement
LLP agreement is very vital for the LLP firm, as it mentions the mutual rights and duties amongst the partners, and between the LLP and the partners. The partners form the LLP agreement after the LLP registration, by filing form 3 online on the MCA online portal. This procedure should be completed in 30 days of the date of LLP incorporation.
Step 4: LLP Incorporation Certificate
After the registrar approves MOA and AOA, you need to apply for the LLP Incorporation Certificate. You can do it by submitting all documents to the registrar within 2- 12 days. Once you receive the LLP Incorporation Certificate, you can start the company operations.
Step 5: Apply For PAN & TAN & Bank Account
After getting the incorporation certificate, the company needs to apply for PAN & TAN with the NSDL.
