Limited Liability Partnership(LLP) is defined as partnership and registered under Limited Liability Partnership(llp) Act in the office of Registrar of Companies (ROC), India. LLP Registration is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partners. The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name. The LLP Firm is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP. Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.
Key features of New LLP Registration:
- LLP Firm shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession; like a corporation.
- There shall not be any upper limit on number of partners in an LLP Firm unlike an ordinary partnership firm where the maximum number of partners can not exceed 20 (10 in case of banking)
- While the LLP will be a separate legal entity, liable to the full extent of its assets, the liability of the partners would be limited to their agreed contribution to the LLP. Further, no partner would be liable on account of independent or unauthorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partners wrongful business decisions or misconduct.
- The framework of LLP is not restricted to professional services alone. Several business activities can be undertaken using the LLP structure.
Easy to Form: It is very easy to form LLP, as the process is very simple as compared to Companies and does not involves much formalities.
Liability: A LLP exists as a separate legal entity from its partners. Both LLP and its partners are separate entities and both functions separately. Liability for repayment of debts and lawsuits incurred by the LLP lies on it and not on the partner. Any business with potential for lawsuits should consider incorporation, it will offer an added layer of protection.
Perpetual Succession: An incorporated LLP has perpetual succession. Notwithstanding any changes in the partners of the LLP, the LLP will be a same entity with the same privileges, immunities, estates and possessions. The LLP shall continue to exist till its wound up in accordance with the provisions of the relevant law.
Flexible to Manage: LLP Act 2008 gives LLP the atmost freedom to manage its own affairs. Partner can decide the way they want to run and manage and put the same in form of terms and conditions in the LLP Agreement . The LLP Act also in most cases provides that the said provision will applicable, only in case nothing is provided in the LLP Agreement.
Easy Transferable Ownership: It is easier to become or leave the partnership of the LLP or otherwise it is easier to transfer the ownership in accordance with the terms of the LLP Agreement. Ceasing of old partners and coming of new partners , will automatically leads to change in ownership of LLP.
Separate Property: A LLP as legal entity is capable of owning its funds and other properties. The LLP is the real person in which all the property is vested and by which it is controlled, managed and disposed off. The property of LLP is not the property of its partners.
Taxation: LLP is not required to pay surcharge on income tax. Moreover , it is also not required to pay tax on profits distributed to partners whereas Company is required to pay tax on dividend distributed to its shareholders.
Raising Money: Financing a small business like sole proprietorship or partnership can be difficult at times. A LLP being a regulated entity like company can attract finance from PE Investors, financial institutions etc.
Capacity to sue: As a juristic legal person, a LLP can sue in its name and be sued by others. The partners are not liable to be sued for dues against the LLP.
No Mandatory Audit Requirement: In LLP, only in case of business, where the annual turnover/contribution exceeds Rs 40 Lacs/Rs 25 Lacs are required to get their account audited annually by a chartered accountant. This provides great relief to small businessmen.
Partners are not agent of other Partners: In LLP, Partners unlike partnership are not agents of the partners and therefore they are not liable for the individual act of other partners.
DOCUMENTS REQUIRED FOR LLP COMPANY REGISTRATION:
- Self attested Copy of PAN Card of all the proposed partners.
- Self attested Copy of ADDRESS PROOF (Voter ID/DL/Passport/Aadhar Card)of all the proposed partners.
- Self attested Copy of Bank Account Statement/Electricity Bill/Mobile Bill of all the proposed partners.
- Passport Size 3 Photographs of all the proposed partners.
- Duly signed DSC Form of all partners of the LLP.
- Copy of current Electricity Bill/Water Bill/House Tax Etc for the premises proposed to be used as registered office of the LLP.
- If the Property is Rented, then Rent Agreement and NoC from owner of property.
INFORMATION REQUIRED FOR LLP REGISTRATION IN DELHI:
- Educational Qualification of all the Partners.
- Profession/Occupation of all the Partners with area of Operation
- Citizenship alongwith Residential Status of all the Partners
- Place of Birth of all the Partners
- Permanent & Present Residential Status of all the Partners
- Contact Numbers of all the Partners
- Email Ids of all the Partners
LLP COMPANY REGISTRATION DETAILS :
- Preference wise Proposed names of the LLP with Significance of the name
- State in which LLP is to be registered.
- Capital Contribution of the Proposed LLP
- Main Object of the Proposed LLP
- Division of Contribution among the Partners.
- Number of Proposed Designated Partners & partners.