Limited Liability Partnership

Limited Liability Partnership is a corporate body as per Limited Liability Partnership Act, 2008. LLP is preferred form of organization among entrepreneurs as it incorporates the benefits of both partnership firm and company into a single form of organization.

Requirements of LLP Registration

  • Minimum two persons required
  • One designated partner of LLP must be resident in India.
  • The name of LLP should not resemble with name of an existing company, LLP, trademark etc.

Advantages and benefits

  • Lower registration Cost: The cost of registration of LLP is low as compared to any other company (Public or Private).
  • Separate legal entity: An LLP can sue and be sued by others. Partners are not liable in the case of LLP in any legal case.
  • Protection from debts: The partners are protected from the debts of the LLP. The partners will not be liable individually for the debts of the business.
  • Lesser compliances than Private Limited Company: Limited companies need to hold board meeting at least once in every quarter and maintain minutes for such meetings. An LLP does not have to adhere to such compliance.
  • No Audit Requirement: LLP is easy to manage and statutory audit is not required for Limited Liability Partnership. Tax Audit is also not required for LLPs with capital less than Rs. 25 lac and turnover not exceeding Rs. 40 lacs.

LLP vs Partnership Firm

Particulars

Partnership Firm

Limited Liability Partnership

Governing Law

The Partnership Firm registered under Partnership Act, 1932.

The Limited Liability Partnership registered under Limited Liability Partnership Act, 2008.

Minimum and maximum number of partners required

Minimum 2 Partners; Partnership Act does not restrict maximum number of Partners but as per Companies Rules there can be a maximum number of 50 partners

Minimum 2 Partners and no maximum limit is prescribed under the Act.

Minor as a partner

A Minor cannot become partner but with the consent of all other partners he can be admitted to the benefits in the partnership firm.

Minor cannot become partner of LLP but can be admitted to the benefits upon consent of all other partners.

Liability of Partner

The partners of Partnership Firm are personally liable for the liabilities of the partnership.

The liability of partner is limited to the amount contributed in the LLP.

Separate legal entity

The partner and Partnership Firm are not considered as separate legal entity.

The partners of LLP and LLP are considered as separate legal entities.

Governing Document

The Partnership deed governs all the operations and management of Partnership Firm.

The LLP Agreement governs all the operations and management of the LLP.

Conversion

The Partnership Firm can be converted into LLP or Private Limited Company.

The LLP cannot be converted back into Partnership Firm but it can be converted into Private Limited Company

Compliance

  1. No requirement of annual return filing for Partnership Firm.
  2. The Partnership Firm has to file its Income tax return annually and file TDS returns every quarter.
  3. The firm may be subject to Income tax Audit depending upon turnover.
  1. Form 8 and Form 11 are to be filed with the ROC as annual compliance for an LLP. The LLP may be statutorily required to be audited under the Act.
  2. LLP has to file its Income tax return annually and file TDS returns every quarter.
  3. The firm may be subject to Income tax Audit depending upon turnover.

 

The formation and regulation of limited liability partnerships is governed by Limited Liability Partnership Act, 2008 and the rules made thereunder i.e. Limited Liability Partnership Rules, 2009

A Limited Liability Partnership is a legal entity separate from its partners and therefore, offers limited liability to its partners whereby any debts and obligations of the LLP will be borne by the assets of the LLP. In the case of a conventional partnership, the partners are jointly and severally liable for each debt and obligation of the partnership firm.

In LLP, two types of partners can be appointed i.e. Designated Partner and Partner. There must be at least two Designated Partners. At least one of them shall be a resident in India.

Yes, an LLP can be converted into a Private Limited Company by following the provisions provided in the Companies Act.

Yes, you can change the registered office address of the LLP while shifting office from one place to another. Such change can be recorded by entering into a supplementary agreement. An LLP must file the form for change in office address. The form shall be filed with MCA within 30 days of the change.

No. Once the LLP is formed, it will be valid till it is officially closed down by the owners. No renewal or fees is required. However, every year LLPs have to file very basic returns with ROC office.

Director Identification Number (DIN) is a unique identification number required for a person to become Partner of LLP. DIN is issued by ROC office (Ministry of Corporate Affairs) It is similar to a PAN Card number. DIN is to be mentioned in documents while appointing a person as a Partner of an LLP.

 

A digital signature Certificate is electronic signature, which is in the form of codes. It is used for signing the electronic forms, filed with ROC for formation of LLP. Digital Signature cannot be used in physical documents.

A limited liability partnership agreement is a contract made between the members of an LLP to establish a fair relationship between their partners and to protect their investment.

If your expected turnover cross 20 lakh rupees in a year then Yes, its required but suggest you always go with the GST Registration after the incorporation of LLP. It’s helpful to claim the input tax credit.

Every LLP needs to file Form 8 and Form 11 every year. Also, LLPs whose annual turnover exceeds Rs. 40 lakh or partner's obligation of contribution exceeds Rs. 25 lakhs are required to get their books audited under the LLP Act.

What's included

  • DIN for 2 partners
  • DSC for 2 Partners
  • Name approval Of LLP Company
  • Filing of E-forms with the Registrar of Companies (ROC)
  • Drafting of LLP Deed
  • Incorporation Certificate
  • LLP PAN Card

Documents Required

  • Copy of PAN Card of partners 
  • Passport size photograph of partners
  • Partners identity proof: Driver’s license or Aadhar card, residence card or election identity card issued by the Government
  • Address Proof: Latest Bank statement/Utility bill in the name of director which should not be older than two months
  • Registered Office Proof: Electricity/ Water bill/ Telephone bill/ Latest bank statement as proof of Registered Office (Business Place)
  • Copy of Sale Deed/Property Deed (If owned property)

Limited Liability Partnership


Register your Limited Liability Partnership Registration in India with Filecrat at best prices in India. Get LLP agreement or deed drafting , DSC & DIN for 2 partners and name search.

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