Limited Liability Partnership

Overview of the Limited Liability Partnership Registration procedure in India:

Limited Liability Partnership, similar to Private Limited Companies, is registered with the Ministry of Corporate Affairs. Limited Liability Partnership or LLP is the preferred type of business for entrepreneurs or startups. LLP can be easily operated as the advantage of limited liability equals the sum of investment into the company. If the partnership is dissolved, the investors cannot demand the partner’s assets or income to compensate for their losses.

Advantages of registering a Limited Liability Partnership:

LLP can be the best option for you if you are running startups along with these benefits:

• Limited Liability: As the name suggests, the partners in this type of firm have the relief of Limited Liability. This means that their liability is restricted to the amount of their total contribution to the company. This secures the personal assets and wealth of the partners in cases like – repayment of the company’s debt in case of bankruptcy or compensation for the wrong deed committed by a fellow partner.
• It is a Separate Legal Entity: Similar to a Private Company; an LLP is also regarded as a separate legal entity. This gives it all the legal rights and allows it to buy assets and properties in its name by being an artificial person.
• Absence of Owner Distinction: In an LLP, there’s no separate ownership like in the case of a Private Company’s directors and shareholders. The company is owned and operated by all of the partners.
• Not rigid agreement regulations: The agreement of an LLP can be created and drafted whenever required. It should just mention the rules and regulations or the rights and duties of the partners.
• Less Compliance required: Unlike a Private Limited Company, an LLP holds just three compliances yearly. This makes it a budget alternative to a Private Limited Company.
• Easy to dissolve: an LLP can be dissolved in two to three months, while a Private Limited Company will need more than a year. Therefore, it is both an easy start and an uncomplicated end in the case of an LLP.

Requirements to fulfil while setting up a Limited Liability Partnership:

There are specific requirements to set up a Limited Liability Partnership; they are as follows:

• Partners Regulations: A minimum of two partners are required to start an LLP, and you can include as many new partners as you want. Among these partners, one partner should be an Indian resident.
• In case of a Corporate Body Partner: A person should be representing a Corporate Body in case of such partnership.
• Partner’s Contribution: Every partner must have contributed an agreed amount to the shared capital of the partnership.
• Minimum Capital: The minimum capital required to start an LLP is one lakh INR.

What are the documents required when registering your Limited Liability Partnership?

These are the list of documents required for registration of an LLP:

• Aadhar card/ voter’s ID/ Passport/ Driving License of the partners as their identity proof.
• The PAN Card and Passport in case of foreign nationals
• Latest bank statement/ telephone bill/ mobile bill/ electricity bill/ gas bill as address proof of the office.
• Specimen Signature on a Blank Document
• Passport size photographs
• In the case of a rented property, a NOC and rental agreement will be needed
• In the case of an owned property, the property deed is required

Step by Step guide to the Registration Process:

The experts at Eazy Startups can shorten the process of registering an LLP. However, the initial steps of the Registration process for an LLP are as follows:

• Applying for DSC and DIN of two partners
• Applying for the name registration and checking its availability through the LLP-RUN form
• Preparing and Drafting the LLP Agreement
• Collecting LLP Incorporation Certificate on approval of documents from registrar
• Applying for PAN. TAN and Bank Account

Frequently Asked Questions