There are several ways of registering companies in the country, one of which is the Limited Liability Partnership (LLP) form. Under LLP, two or more partners enter into a special agreement and have limited responsibilities. LLP was started in India under the “Limited Liability Partnership Act, 2008” Small and Medium Enterprises (SMEs) can operate as LLP. LLP is especially suitable for service sector for professionals like Company Secretaries, Chartered Accountants, Lawyers, Cost Accountants etc.
Benefits of LLP Registration
No Minimum Capital Contribution
There is no specific contribution needed by any partner.
Relaxed Government Regulations
There are minimal compliances and interventions of government regulations.
Number Of Registered Firms
There is no limit on the maximum number of registered firms.
Relaxed Audit Norms
LLP is not legally required to audit its books unless its turnover is Rs40,00,000(Forty lakhs). Owners or entrepreneurs whose turnover is fewer than 40 lakhs and a capital contribution of fewer than 25 lakhs will require an audit of their books. Limited Liability Partnerships are good for Start-ups and small firms that do not want to start with strict regulatory compliances.
One of the major advantages of a Limited Liability Partnership is that you are only legally responsible for a certain amount of debt.
LLPs RELATED LAWS
LLPs are registered under the LLP Act, 2008 and regulated by the Ministry of Corporate Affairs (MCA), and extended to the Registrar of Companies of the respective states where the LLP will have its registered office address.
Eligibility of LLP Registration
The following criteria must be met for LLP Registration:
There must be at least two (2) partners required for the registration and there is no upper limit for the same.
There must be at least Rs 1 lakh (one lakh) capital required for the authorization of LLP registration.
Each partner must share agreed capital towards the LLP.
One designated partner should be an Indian resident.
How limited Liability Partnership Works
LLPs are legal entities.
LLPs work by allowing general partners to limit all the amount of liability they share and these limitations are assigned according to their level of investment in the business.
LLP allows all partners to contribute risk, labor distribution, and capitalize on individual abilities.
LLP is liable for its acts only to the extent of its assets.
LLPs are also used for entities such as capital funds, that combine risk capital with financial expertise and for individuals such as CS and advocates.
Documents Required for LLP Registration
Latest passport size Photographs of all partners.
PAN Card of all Partners (Minimum 2)
Identity Proof of each partner (Aadhar Card, Passport, Driving License, or Voter ID Card)
Address Proof of all partners (Bank Statement or Passbook, electricity bill, telephone bill, Aadhar Card, or any utility bill)
Copy of Mobile bill, telephone bill, electricity bill, or Bank Statement of all Partners with Present address Registered Office Address Proof – Electricity Bill along with Rent Agreement/ownership proof of proposed registered office.
Stamp paper for LLP Agreement of State where LLP is to be Incorporated
Documents Must be self-attested