Apply for LLP formation

LLP formation

LLP is known as the Limited Liability Partnership. It is introduced as a new pattern in the corporate organization in India which basically focuses on the small and medium-sized business. The LLP gives benefit to a Private Limited Company.

Features of LLP

It has a separate legal entity just like companies
The liability of each partner is limited to the contribution made by partner
The cost of forming an LLP is low
Less compliance and regulations
No requirement of minimum capital contribution

The minimum number of partners to incorporate an LLP is 2. There is no upper limit on the maximum number of partners of LLP. Among the partners, there should be minimum two designated partners who shall be individuals, and at least one of them should be resident in India. The rights and duties of designated partners are governed by the LLP agreement. They are directly responsible for the compliance of all the provisions of LLP Act 2008 and provisions specified in LLP agreement.
If you want to start your business with Limited Liability Partnership, then you must get it registered under Limited liability Partnership Act, 2008.

Steps to form a limited liability partnership

Step 1 - Digital Signature Certificate (DSC)

Before initiating the process of registration, you must apply for the digital signature of the designated partners of the proposed LLP. This is because all the documents for LLP are filed online and are required to be digitally signed.
So, the designated partner must obtain their digital signature certificates from government recognized certifying agencies. Here is a list of such certified agencies. The cost of obtaining DSC varies depending upon the certifying agency. Also, you should obtain either class 2 or class 3 category of DSC or you can click here & let a Taxsuperman expert procure DIN for you. If you go for Limited Liability Partnership company registration with Taxsuperman, up to 2 DINs are covered in the plan & there is no need to apply for DIN separately.

Step 2 - Director Identification Number (DIN)

You have to apply for the DIN of all the designated partners or those intending to be designated partner of the proposed LLP.
The application for allotment of DIN has to be made in Form DIR-3. You have to attach the scanned copy of documents (usually Aadhaar and PAN) to the form. The form shall be signed by a Company Secretary in full- time employment of the company or by the Managing Director/Director/CEO/CFO of the existing company in which the applicant shall be appointed as a director.

Step 3 - Reservation of Name

LLP-RUN(Limited Liability Partnership-Reserve Unique Name) is filed for the reservation of name of proposed LLP which shall be processed by the Central Registration Centre under Non-STP. But before quoting the name in the form, it is recommended that you use the free name search facility on MCA portal. The system will provide the list of closely resembling names of existing companies/LLPs based on the search criteria filled up.
This will help you in choosing names not similar to already existing names. The registrar will approve the name only if the name is not undesirable in the opinion of the Central Government and does not resemble any existing partnership firm or an LLP or a body corporate or a trademark. The form RUN-LLP has to be accompanied with fees as per Annexure ‘A’ which may be either approved/rejected by the registrar. A re-submission of the form shall be allowed to be made within 15 days for rectifying the defects. There is a provision to provide for 2 proposed names of the LLP.

Step 4 - Incorporation of LLP

The form used for incorporation is FiLLiP(Form for incorporation of Limited Liability Partnership) which shall be filed with the Registrar who has a jurisdiction over the state in which the registered office of the LLP is situated. The form will be an integrated form.
Fees as per Annexure ‘A’ shall be paid.
This form also provides for applying for allotment of DPIN, if an individual who is to be appointed as a designated partner does not have a DPIN or DIN.
The application for allotment shall be allowed to be made by two individuals only.
The application for reservation may be made through FiLLiP too.
If the name that is applied for is approved, then this approved and reserved name shall be filled as the proposed name of the LLP

Step 5 - File Limited Liability Partnership Agreement

LLP agreement governs the mutual rights and duties amongst the partners and also between the LLP and its partners.
LLP agreement must be filed in form 3 online on MCA Portal.
Form 3 for LLP agreement has to be filed within 30 days of the date of incorporation.
The LLP Agreement has to be printed on Stamp Paper. The value of Stamp Paper is different for every state.

Documents required to register as LLP

Documents of Partners

PAN Card/ ID Proof of the Partners
Address Proof of the partners
Residence Proof of Partners
Photograph
Passport (in case of Foreign Nationals/ NRIs)

Documents of LLP

Proof of Registered Office Address
Digital Signature Certificate

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Expert Assisted LLP formation By TaxSUPERMAN

Filing of E-forms

Drafting of LLP Deed

Designated Partner Identification Numbers-DPINs (2 nos.)

Digital Signature Certificates-DSCs (2 nos.)

Issue of Incorporation Certificate

Includes Government Fees upto Rs. 1 Lakh Capital Contribution by Designated Partners

Stamp Duty upto Rs. 2000/- and its Notarisation in any state in India for LLP Deed

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FAQ

What is an LLP?

A Limited Liabilty Partnership firm (LLP) is a hybrid structure between a partnership firm & a private limited company where the business is carried out in a corporate framework, guided by terms of the mutually adopted partnership deed.

What are the advantages of registering as an LLP over general partnership firms?

Liability- In a general partnership firm, partners are personally liable for debts of the business which means that even their personal property may be used to settle the firm’s debts. Whereas, the liability of partners is limited in case of an LLP.
Immunity against wrong doings of other partners- Under LLP structure, partners are not responsible for negligence or misconduct of other partners whereas in general partnership firms, partners can be held responsible.

Does the Income Tax Act treat partnership firms and LLPs differently?

Both general partnerships and LLPs are taxed at flat rate of 30%.
All the other income tax act provisions apply similarly except that general partnership firms are covered under presumptive taxation scheme i.e if turnover is below Rs. 2 crore in business or Rs. 50 lakh in case of profession, there is no need to maintain books of accounts or get accounts audited whereas, LLPs are explicitly not covered.

What is the minimum capital requirement for LLPs?

There is no minimum capital contribution requirement. It can be registered even with Rs. 100 as total capital contribution.

What is the audit requirement for LLP?

Accounts of an LLP are required to be audited when the turnover is Rs. 40 lakh or more or when the total capital contribution is Rs. 25 lakh or more.
The auditor of an LLP is appointed annually by the designated partners.
The first auditor is appointed before the end of the financial year. Subsequent appointment or reappointment of the auditors is made one month before the closing of the financial year by the designated partners.

Do I need to have any prerequisite documents to start an LLP?

Due to recent changes on MCA portal, incorporation of LLP can only proceed after 2nd October 2018 if any of the partners do not have DIN / DPIN.

My details on my documents have a difference. Can I still incorporate my company using them?

You will need to have exactly the same details on all your documents to incorporate your company.