Overview

A Limited Liability Partnership (LLP) is a type of business structure in India that combines the benefits of a partnership and a limited liability company. It is a separate legal entity from its partners and provides limited liability protection to the partners. This means that the personal assets of the partners are protected in case of any legal or financial liability incurred by the LLP. LLPs are governed by the Limited Liability Partnership Act, 2008, and can be registered with the Ministry of Corporate Affairs (MCA). Unlike a traditional partnership, LLPs have perpetual succession and partners are not personally liable for the actions of other partners. The LLP structure also offers flexibility in terms of ownership and management, allowing partners to define their roles and responsibilities as per their agreement.

What are the various benefits of a limited liability partnership in India?

There are several benefits of forming a Limited Liability Partnership (LLP) in India, including:


• Limited liability: The partners of an LLP are not personally liable for the debts and obligations of the LLP. The liability of the partners is limited to their capital contribution in the LLP.
• Flexibility in management:: An LLP is managed and governed by its partners, and they can decide the internal management structure and responsibilities as per their convenience.
• Easy to form and operate: The process of registering an LLP is simple and straightforward, and the compliance requirements are relatively less compared to other forms of business structures.
• Separate legal entity: An LLP is a separate legal entity, and it can own property, enter into contracts, and sue or be sued in its own name.
• Tax benefits: An LLP is taxed as a partnership, which means that the LLP is not taxed on its profits. Instead, the partners are taxed on their share of profits as per the Income Tax Act, 1961.

• No restrictions on the number of partners: There is no minimum or maximum limit on the number of partners in an LLP, and it can have both individuals and corporate entities as partners.
• Transferability of ownershipy: The ownership of an LLP can be easily transferred to another person by transferring the ownership rights.

• Continuity of existence: The cost of Incorporating an LLP is relatively low compared to other business structures such as a private and public limited company. Also, the quantum of compliances is on the low for these entities. The LLP is mandated to file only two statements a year, i.e. Statement of Accounts and Solvency and an Account return.These benefits make LLP a popular choice of business structure for small and medium-sized enterprises in India.

Required Documents

The following documents are required for LLP registration in India:

• Identity proof and address proof of designated partners: PAN Card Passport or Voter ID or Driving License, Aadhaar Card or utility bill (not older than two months)
• Address proof of registered office: Rent agreement or sale deed or electricity bill or property tax receipt, No-objection certificate (NOC) from the landlord (if the registered office is rented)
• Address proof of registered office:
• LLP agreement
• Form DIR-3 (for obtaining Director Identification Number)
• Form LLP-1 (for incorporation of LLP)

Registration Process

Here are the steps involved in registering a Limited Liability Partnership (LLP) in India:

• Obtain Digital Signature Certificate (DSC) and Designated Partner Identification Number (DPIN): The first step is to obtain a DSC and DPIN for the partners who will be involved in registering the LLP. These can be obtained from a government-approved agency.
• Choose a name for the LLP: You need to choose a unique name for your LLP that is not similar to any existing company or LLP. The name should comply with the guidelines provided by the Ministry of Corporate Affairs (MCA).
• File for name approval: Once you have chosen a name for your LLP, you need to file an application for name approval with the MCA.
• Draft the LLP agreement: After the name is approved, you need to draft an LLP agreement which should include details like the name of the LLP, address of the registered office, name of the partners, capital contribution of each partner, profit-sharing ratio, etc.
• File for LLP registration: Once the LLP agreement is ready, you need to file an application for registration of LLP with the MCA along with the required documents like PAN card, address proof, identity proof, etc.
• Payment of fees and stamp duty: You need to pay the required fees and stamp duty as per the LLP agreement.
• Obtain the Certificate of Incorporation: Once all the documents are submitted and fees are paid, the Registrar of Companies (ROC) will verify the documents and if everything is in order, issue a Certificate of Incorporation.
• Obtain PAN and TAN: Once the LLP agreement is filed, you can apply for PAN and TAN for the LLP.
• File LLP agreement with ROC: After obtaining the Certificate of Incorporation, you need to file the LLP agreement with the ROC within 30 days.
• Open bank account: Finally, you can open a bank account for your LLP using the Certificate of Incorporation and LLP agreement.

Annual Compliances of a Limited Liability Partnership

Annual compliances for a Limited Liability Partnership (LLP) in India are:

• Annual Return Filing: Every LLP is required to file its Annual Return within 60 days from the closure of the financial year. The Annual Return must be filed in Form 11 with the Registrar of Companies (ROC).
• Statement of Account and Solvency Filing: Every LLP is required to file a Statement of Account and Solvency within 30 days from the end of six months of the financial year. The Statement of Account and Solvency must be filed in Form 8 with the ROC.
• Income Tax Return Filing: Every LLP is required to file its Income Tax Return annually. The due date for filing the Income Tax Return is generally July 31st of the assessment year.
• GST Return Filing: If the LLP is registered under the Goods and Services Tax (GST), it is required to file its GST returns monthly or quarterly, depending on the turnover.
• Other Compliances: LLPs must also comply with other statutory requirements such as maintaining proper books of accounts, conducting annual general meetings, and filing of various forms with the ROC as and when required.

Why approach LAWYASA?

• Expert guidance: Lawyasa provides expert guidance and assistance throughout the registration process, ensuring that all legal requirements are met.
• Online platform: Lawyasa is an online platform, which means that you can access our services from anywhere, anytime.
• Experienced professionals: Lawyasa has a team of experienced professionals who are well-versed in legal requirements and can provide expert advice and guidance.
• Quick turnaround time: Lawyasa strives to provide quick and efficient services, ensuring that your registration is completed in a timely manner.

How can LAWYASA assist?

Lawyasa can assist in the registration process of a Limited Liability Partnership (LLP) in India by providing the following services:

• Consultation: Lawyasa can provide an initial consultation to understand the requirements and objectives of the LLP.
• Name reservation: Lawyasa can assist in reserving a suitable name for the LLP through the Ministry of Corporate Affairs (MCA) portal.
• Preparation of documents: Lawyasa can prepare all the necessary documents required for the registration of the LLP, including the LLP agreement and other incorporation documents.
• Filing of forms: Lawyasa can help in filing the necessary forms with the Registrar of Companies (ROC) for the registration of the LLP
• Follow-up: Lawyasa can follow up with the ROC for the status of the LLP registration and provide regular updates to the client.
• Annual compliance: Lawyasa can also provide assistance in ensuring that the LLP complies with all the annual compliance requirements as per the LLP Act, including the filing of annual returns and financial statements.
• Other services: Lawyasa can also provide other related services such as obtaining Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) for the partners of the LLP.

Frequently Asked Questions

Here are some frequently asked questions regarding Limited Liability Partnership (LLP) in India: