An Overview of Online LLP Registration
After January 2009, the Limited Liability Partnership (LLP) was born in India, and it quickly became an instant success with startups and professional services. The Limited Liability Partnership Act of 2008 governs Limited Liability Partnership Registration, which combines the advantages of a partnership and a limited liability company. LLPs were created to give an easy-to-manage corporate structure and to protect shareholders by limiting their liability.
Incorpz is one of the most cost-effective and reliable service providers for LLP registration in India.
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Why register an LLP company? – Advantages
After you’ve decided on your business model, you’ll need to decide between forming a private limited company and forming an LLP. You’ll need to understand the differences and benefits of each so you can pick the one that’s right for you.
The most important reason for forming an LLP is the limited liability it provides. The firm’s members are only liable for a small amount of the debt it has incurred. This is in contrast to sole proprietorship and partnership, which do not protect the personal assets of directors and partners if the company goes bankrupt.
Separate Legal Entity:
The LLP is a legal entity distinct from the partners. In the event of a disagreement, either partner has the right to sue the other.
It has an uninterrupted existence that follows a perpetual succession, i.e., the partners may quit, but the company continues to exist. For the firm to dissolve, both parties must agree on a dissolution term.
It is also straightforward to transfer the ownership of an LLP. A person can be easily inducted as a designated partner, and ownership of the company is transferred to them.
Suitable For Small Businesses:
Formal audits are not required for LLPs with a capital of less than 25 lakhs and a turnover of less than 40 lakhs per year. It benefits small enterprises and startups to register as an LLP.
Because it is recognized as a legal entity, an LLP can possess or purchase property. The property cannot be claimed by the LLP’s partners.
No Owner /manager Distinction:
An LLP is made up of partners who own and operate the company. A private limited company, on the other hand, may have directors who are not shareholders. As a result, venture capitalists do not invest in the LLP structure.
Simple procedures to form an LLP in India – A step-by-step guide
At Incorpz, we make the LLP registration procedure simple and straightforward.
- Partner’s basic documentation should be arranged.
- Complete an online form with accurate information.
- Obtain a Digital Signature and a Partner’s DIN.
- Prepare all legal paperwork.
- Check the proposed LLP’s name availability.
- All documents and forms are checked by the appropriate government departments and authorities.
- File Incorporation Docs with ROC
- Get LLP Incorporation Certificate
- Drafting of LLP Agreement
- Filing of LLP Agreement
Step 1: Get your DSC and DIN numbers
The first stage is to get the DSC of the Limited Liability Partnership’s desired partners. This is because all of the forms must be filed online and include the directors’ digital signatures.
All directors must also apply for a DIN number, which is required under law. The application must be submitted in DIR- 3 format.
Step 2: Application For Name Approval
The LLP must be registered as part of this process. You should first check to see if the name has already been taken. On the MCA portal, you can use the free search feature. The registrar will only approve LLP names that haven’t already been taken.
The Registrar will only approve the name if the Central Government does not find it objectionable. There should be no resemblance to any existing partnership firms, LLPs, trademarks, or corporations in the name.
Step 3: LLP Agreement
In a limited liability partnership, the LLP agreement is very important since it establishes the mutual rights and responsibilities of the partners as well as the LLP and the partners. When the LLP is registered, the partners sign into an LLP agreement by filling out Form 3 on the MCA portal. This step must be completed within 30 days of the incorporation date.
Step 4: LLP Incorporation Certificate
You’ll be one step closer to registering your LLP after the registrar approves your MOA and AOA. The LLP Incorporation Certificate is the next stage. You can do so by submitting all of your documentation to the registrar’s office. The time span is between 2 to 12 days. You’re set to start after you’ve received your LLP Incorporation Certificate.
Step 5: Apply For PAN & TAN & Bank Account
You must apply for your company’s PAN and TAN with the NSDL as soon as you receive your incorporation certificate. This procedure costs less than Rs.200 and takes approximately three weeks to complete.
Check to see if your company qualifies for an LLP in India.
To be eligible for LLP registration, you must first start a business and meet certain specific requirements.
When it comes to internal management, profit distribution, and tax liabilities, the traditional partnership structure and the LLP have a lot in common. However, it exposes the partners to less financial risk (limited liability).
Any business that has:
- An LLP must have at least two partners to be formed. The maximum number of partners is unlimited.
- If a body corporate is a Partner, a natural person’s nomination is required.
- There is no necessity for shared capital, but each partner must agree to make a contribution.
- Minimum capital contribution: An LLP is not required to have a certain amount of capital (or a company, for that matter). The LLP must have a minimum authorized capital of Rs. 1 lakh.
- At least one Designated Partner as an Indian resident
- DPIN for all Partners
- DSC for all the Designated Partners
- Proof of address for the LLP’s office. An LLP’s registered office does not have to be a business location. Even a rented property might serve as the registered office if the landlord provides an NoC.
- Foreign investors can now have a 100% FDI in the automatic route LLP, thanks to revisions in the FDI legislation enacted on November 10, 2015. Foreign firms that operate in activities or sectors where 100% FDI is regarded lawful under the automatic method are eligible for 100% FDI in the LLP. Furthermore, there should be no performance requirements associated to FDI. With regard to the LLP, a clear meaning of phrases like “internal accruals” and “ownership and control” has been supplied. As a result, FDI in LLP facilitates and accelerates foreign investment.
- LLPs will also be able to invest downstream in a different firm or choose LLP in areas that allow 100% FDI via the automated approach. There are no FDI-related performance limits as a result of this.
Factors to consider while selecting a name for your LLP in India
The Registrar of Companies (RoC) has established name criteria for limited liability partnerships (LLPs). It is critical that you adhere to the guidelines closely, or your application may be rejected, resulting in a significantly lengthier procedure.
AlphaBeta Internet Private Limited’s distinctive component is AlphaBeta. Now that the name has been chosen, it will not be provided to any other company in categories relating to the Internet.
Abbreviations, adjectives, and generic terms are all disqualified. As a result, XYZ and Good Quality Biscuits would be refused. The words bank, exchange, and stock exchange would also be rejected unless they were approved by the RBI or SEBI.
No common trademark:
On the IP India website, there should not be a registered trademark with the same name. If there is one, the name will only be allowed if you can obtain a No-Objection Certificate from the owner granting you permission to use it.
The word ‘Research’ describes the company’s business at Gensen Research Private Limited. If you work in logistics or a restaurant, you can’t have the word “research” in your name.
Verify the LLP Name Availability:
The government has put together a complicated process with various restrictions, thus naming an LLP is generally a time-consuming process. According to the Companies Act of 2013 and the LLP Act of 2008, there are permitted names for an India LLP. Fortunately, Incorpz has created an easy-to-use tool to ensure that you are not inconvenienced simply because you are looking for a name.
Why go with Incorpz LLP Registration Package?
The new process has been recognized by Incorpz. We have assisted many entrepreneurs, financial advisors, and marketing agencies in registering their company as LLP India for many years. Our LLP services are broad and reach every corner of the country, from Chennai to Bangalore to Mumbai and beyond.
LLP registration is one of the simplest processes in India with Incorpz. We make the entire compliance procedure as simple and feasible and make every effort to complete it as quickly as possible. You get a few undeniable benefits when you choose us as your LLP registration partner. The Ministry of Corporate Affairs has released modifications to the LLP and Incorpz takes care of them for you.
- DSC for one director and DIN for up to three directors
- Drafting of MoA & AoA
- Registration fees and stamp duty
- Company Incorporation Certificate
We can also assist you with:
- A free initial consultation will be followed by additional meetings to address any concerns you may have.
- Complete assistance in setting up a current bank account
- ROC compliance updates are comprehensive and timely.
- One-year access to online accounting software.
- A master file including all of the documents required to file the incorporation.
- At all times, a dedicated service manager is present.
- Because an LLP is a separate legal entity from an existing partnership firm, it will have its own unique name pan card, requiring a new/separate GST registration in the LLP’s name.
- You’ll also get a Zero Balance Current Account – from our preferred banking partners*
LLP FAQs: The Advantages of a Partnership Firm and the Security of a Private Limited Company
☑ In an LLP, what are the requirements for selected partners/partners?
A partner might be an individual, a corporation, or an LLP. In an LLP, however, only one person can be a “designated partner.”
☑ I am a NRI. Is it possible to form an LLP in India?
Yes, non-resident Indians and foreign citizens who want to form an LLP can do so if they submit the required documents after having them notarized by the appropriate authorities. In an LLP, however, at least one of the selected partners must be an Indian national.
☑ What are the requirements for starting an LLP?
An LLP can be formed by any group of people who have or wish to invest money in a business. According to the Act of 2008, a person or an investor becomes a partner if the LLP agreement is followed. The investors/partners are also the owners of the LLP-based business.
☑ What is a Limited Liability Partnership (LLP) agreement?
An LLP agreement governs the relationship between the individual partners in the LLP and is made between the partners and the LLP. Management policies, new partner involvement, policy-making strategies, and other items are frequently included in an LLP agreement.
☑ What is the minimum number of partners required to start a limited liability partnership (LLP)?
A minimum of two designated partners are necessary to form an LLP, according to the LLP Act. The designated partners are in charge of meeting all of the fundamental conditions for forming and operating an LLP.
☑ What kind of businesses often form LLPs?
LLPs are typically used by start-ups that are not seeking venture capital funding. Due to the fact that venture capitalists only invest in private and public limited enterprises, this is the case.
☑ Is an LLP cheaper to run than a private limited company?
Yes, running an LLP is far less expensive than running a private limited company, especially in the early stages of your business. This is because many regulations, such as audits, only apply to LLPs until they have a significant amount of revenue. In its first year, most LLPs spend around half as much on registrations and compliance as a private limited company.
The government announces relief measures to encourage compliance.
The MCA has introduced two new programmes: the Companies Fresh Start Scheme and the Revised LLP Settlement Scheme. There is a penalty waiver of up to Rs. 107800 for one year and Rs. 136900 for two years until September 30th.
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If you have any questions about the process, our team of experienced business consultants is just a phone call away. However, we will make every effort to clarify any doubts you may have before they arise.