LLP Registration Procedure in India & How to get it
Defining a
Partnership firm
‘The Indian Partnership Act, 1932, Section 4 states the rules, regulations and laws of a partnership firm. Partnership companies are governed by the provisions mentioned in the act. According to the act, a partnership firm is defined as “The relation between individuals who have agreed to share the profits and losses of business.”
Meaning of a Limited Liability Partnership
Limited Liability Partnerships are preferred by Professionals, Small Business Owners and businesses that lack adequate capital or a business idea where the individual is looking to start a company with a minimum amount of investment.
Four important steps to follow for the Registration of Partnership Firm
·
Drafting of
Partnership Deed
·
Notary and
Stamping of Partnership Deed
·
Filing of
Partnership Firm Registration Form
· Filing of PAN application for Partnership Firm
Types of
Partnership Companies
The partnership
companies are categorized into 4 major types as mentioned below-
- General Partnerships(GP)
- Limited Partnerships(LP)
- Limited Liability Partnerships(LLP)
- Limited Liability Limited Partnerships(LLLP)
Limited
Liability Partnership Online Registration Procedure
As per the
LLP Act, 2008, the necessary steps to be followed for a LLP registration procedure are as mentioned below-
- Appoint partners and other crucial members
- Acquire Digital Signature Certificate (DSC)
·
Filing an application for DPIN (Designated Partner
Identification Number)
·
Reserving a name of the company
·
Draft the
LLP Agreement
·
Filling the
Incorporation Application form
·
Filing the Fillip
Form.
A Fillip is
a form of incorporation of Limited Liability Partnership. Form 5, Form 17 and Form 18 must be filled and
submitted for approval to the Registrar after which a Certificate of
Registration will be received. Later, the partners receive LLPIN (Limited Liability Partnership Identification Number)
Benefits of
starting a Limited Liability Partnership firm
- A preferred company type for specific
business types
Limited
liability partnerships can be created by some types of professional service
businesses that hold some specific specializations, such as accountants,
architects, dentists, doctors, analysts and other fields in which the
individual or a group of individuals are professionals under the law.
- Security of Personal assets
The
personal assets of partners in an LLP cannot be used to pay off business debts
and liabilities. The LLP does not guard the partners for incurring liabilities
as a result of their personal acts.
·
Taxation benefits
Profits earned by LLPs are subject to taxes at 30% plus surcharge.
However, sharing of profit amongst the members is not liable to tax under
current tax structure.
The income tax rate applicable for LLP’s registered in India is 30% on the total income. In addition to that, an extra amount is charged on the income tax payable at the rate of 12% once the total income reaches to Rs 1 crores.
Eligibility Requirements for LLP Registration
·
Minimum two
designated partners,
·
One of the
partners must be an Indian resident,
·
All the
designated partners must have DPIN (Designated Partners Identification Number),
·
Every
designated partner is required to hold DSC (Digital Signature Certificate),
· The applicant must have the address proof of the registered office which can be either a residential or commercial place.
Documents Necessary
for Limited
Liability Partnership
Registration in India
Certain
documents required for LLP Registration for an appropriate filing are as
mentioned below-
From the designated
partners
·
A copy of PAN card of the designated partners,
·
A copy of an Aadhaar card of the partners,
·
Address proof which includes mobile or telephone bill,
bank statement,
·
Identity proof of all the partners such as Passport or
Driving license or Voter’s ID card at the time of incorporation,
·
Passport-size photograph of every director and
shareholder,
·
If any of the partners is an NRI or a foreign national,
then he should present the certified passport.
For the
proposed registered office (Residential / Commercial)
·
Current address proof of the registered office, for
instance, electricity bill or water bill or property tax receipt,
·
If the office is situated on a rented location, NOC
(No-Objection Certificate) from the owner is compulsory;
·
A copy of Notarized Rental Agreement, if the property is
rented.
Benefits of
LLP Company Registration
A Limited Liability Partnership serves many benefits,
which is why it is the type of company preferred by many individuals. The
various benefits it serves are-
·
Low Registration cost
·
Restrictions on the Investment amount are minimum
·
Audit is not required or mandatory
·
Minimal Compliances to follow
·
Non- applicability of Dividend Distribution Taxation
·
Perpetual Existence
Low
Registration cost
Just like in
other company types, the cost of registration for Limited liability partnerships
are less, thus making it simpler to start a LLP.
Restrictions
on the Investment amount are minimum
The
investment amount is not fixed; thus the partners can contribute any amount.
The partners can only contribute tangible, movable, steady or intangible property.
Audit is not
required or mandatory
LLP
companies do not have to follow the regular auditing process. However, private
limited companies, public limited companies and other types of companies must
have properly maintained audited accounts.
Minimal
Compliances to follow
There are no
specific set of compliances for Limited Liability Partnership companies, which
makes the running of the LLP less complicated.
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