LLP Company Registration: A Complete Guide on its Benefits, Process & Compliances

LLP Company Registration: A Complete Guide on its Benefits, Process & Compliances

LLp company registration 1

What is LLP

LLP is the acronym for Limited Liability Partnership and was first introduced in India in 2008.

This newentity blends the benefits of a partnership firm as well as a company and hence it’s preferred by many businesses.

Features & Advantages:

  • Just like other companies, LLP has a separate legal entity.

  • A minimum of 2 partners (at least 1 should be an Indian resident) are needed for the formation of an LLP, but there is no limit on the maximum count.

  • LLP permits owners to limit their liabilities.Each partner is liable for their actions and hence they are safeguarded from the joint liability of other partner’s delinquencies.

  • LLP has few compliances and regulations as compared to other entities. Taxation benefits like exemption from dividend distribution tax is also anadded advantages.

  • There is no minimum capital requirement.

  • Its formation is simple and maintenance costs are less.

  • Transfer of ownership is an easy process.

All partners should abide by the rules and regulations of the LLP Act.

Disadvantages of LLP:

  • LLPs are less credible as compared to companies.

  • Yearly filing of returns is compulsory in LLP, irrespective of any business done in the year.

  • In case of non-compliance with any rules, a heavy penalty needs to be paid.

  • Raising capital for forming this entity is a tough call since the concept of shareholders doesn’t apply here.

Registration Process of LLP:

LLp company registration

1: Acquire Digital Signature Certificate (DSC):

The registration process of LLP requires a digital signature of all the partners because all the documents need to be filed and submitted digitally. The concerned can get the DSC from government-certified agencies.>/p>

For acquiring the DIN (Director Identification Number) for LLP partners, DSC is pivotal and the same can be acquired within a day of filing the DSC Application. These signatures are valid for a year or two and can be used for filing tax returns also.

2: Acquiring DIN for Partners:

You need to apply for DIN for all the partners of LLP, i.e., designated or intend to be, all partners need to be covered in this application. Form DIR-3 needs to be filled and submitted for applying for the DIN.

Scanned copies of the Aadhar Card and PAN card need to be attached to the form. Each partner can have only a single DIN.

3: Obtaining Name Approval:

The proposed LLP name can be reserved by filing LLP Form No.1. The same can be done by logging on to the LLP portal with the prescribed fee. The digital signature also needs to be attached for the same.

The partners need to abide by the LLP Naming Guidelines for reserving the name to the MCA (Ministry of Corporate Affairs).

The ROC (Registrar of Companies) will later process the name within the stipulated time.

4: Incorporation of LLP:

Post the acceptance of name approval, an LLP name approval letter will be issued to the partners. After getting this letter, the partners have a time limit of 60 days for filing the documents for incorporation and registration of LLP.

If they fail to abide by the time limit, they will need to re-obtain the name approval for filing the same.

  • FiLLiP (Form of Incorporation of Limited Liability Partnership) needs to be filed along with official registration and possession documents. The same should be digitally signed by partners and later submitted to the ROC.

  • Necessary Fees need to be paid online

  • In case of the absence of DIN, a form for applying for DIN is also available.

After the acceptance of the LLP company registration form, the ROC will issue the incorporation certificate.

5: File for LLP Agreement:

LLP agreement defines the rights and duties of the partners.

  • The LLP agreement (Form 3)should be filed on the MCA Portal.

  • The same needs to be filed within 30 days of receiving the incorporation certificate, else they need to pay a penalty.

  • This agreement needs to be printed on Stamp paper whose cost varies from state to state.

Congrats!! Your LLP is now registered.

Documents required for LLP Registration:

  • PAN Card/ ID Proof of the Partners

  • Address Proof of the Partners

  • Proof of Registered Office Address

  • Residence Proof of Partners

  • Photograph of Partners

  • Digital Signature Certificates

  • Designated Partner Identification Number

  • Passport (in case of Foreign Nationals/ NRIs)

I have penned down the whole process of LLP Company Registration in India. With the help of experienced experts at Choksi Tax Services, this process can be completed smoothly and quickly.

So, are you ready to start your business? Approach Choksi Tax services for simplifying your task and let the experts manage the legal formalities and registration procedures.