Limited Liability Partnership or LLP is a type of business with more extra benefits when compared to a partnership firm. This type provides liability in partnership firm to its partners at a very low abidance cost. Moreover, the Partners of the online LLP registration in India can form their internal business structure similar to a partnership firm.
To be short, LLP registration in India is also considered as a separate legal entity from its members as it holds the power to extend all its property or assets keeping the liabilities of partners limited. Therefore, a Limited Liability Partnership or LLP is a hybrid of both company and a partnership firm.
Overview of LLP Registration
LLP Registration is a popular and well known business structure in the world. Both LLP and Private Limited companies are registered with the Ministry of Corporate affairs under the Central Government. Get your LLP registered & process of registration as LLP with Kanakkupillai.
Limited Liability Partnership or LLP is a type of partnership firm and one of the most chosen types of business by the entrepreneur. With the benefit of limited liability, LLP is the easiest form of business structure.
Advantages of Limited Liability Partnership
The liability of the partners in LLP is limited to the point of his/her contribution to the firm. This is the most important feature of LLP as all the personal assets of its partners are safe and there is no need to pay the losses or debt of the LLP firm. Besides, innocent partners of an LLP or Limited Liability Partnership firm do not have to pay for the wrong deeds made by some other partner of the firm.
Separate legal entity:
An LLP is considered as a separate legal entity. This means the firm has assets in its own name and can be sued and can sue. Moreover, not any partner is responsible or liable for another partner’s negligence or misconduct.
The partners of LLP registration firm are free to prepare and draft the agreement as they need, with regard to the rules and regulations or rights and duties.
No manager/owner distinction:
A Limited Liability Partnership firm has partners, who manage and own the business. An llps is different from a private limited company, as its directors may be different from shareholders. Due to this point, VCs do not invest or fund in the Limited Liability Partnership firm.
Less compliance needed:
A Limited Liability Partnership firm is an easier and cheaper business structure to run when compared with a private limited company as it holds only three compliances every year. But in the case of a private limited company, it should hold a lot of compliances to fulfill the provision and have to conduct an audit regularly.
Easy to wind-up:
Not only is it easy to start a Limited Liability Partnership firm, but it’s also easier to wind-up when compared to a private limited company. Generally, it takes two to three months to complete the winding-up process, whereas it can take more than a year to close a private limited company.
Features of LLP or Limited Liability Partnership
- It considered a separate legal entity just like other companies
- The liability of partnership of the firm is limited to the contribution of the amount made by partner
- Less compliance
- No need for minimum capital contribution
- The cost to startup an LLP is low
- A minimum of 2 partners is needed to incorporate an LLP. There is no limit on admitting maximum number of partners.
- Among the partners, minimum of two designated partners shall be individuals, and one of them must be resident in India.
- The duties and rights of designated partners are regulated and controlled by the LLP partnership agreement. They are individuals who are responsible for the compliance of all the provisions of the Limited Liability Partnership Act 2008 and provisions defined in LLP agreement.
Registration procedure of Limited Liability Partnership Firm
Check out the stepwise procedure to register a LLP and partnership firm in India
- Step 1:Before starting the process of registration, apply for the DSC or digital signature certificate of the designated partners of the LLP.
- Step 2:Apply for the DIN of Director Identification Number for all the designated partners or those who propose to be designated partner of the LLP.
- Step 3:LLP-RUN or LLP-Reserve Unique Name form is filed for the reservation of name for proposed LLP which will be worked by the Central Registration under Non-STP. But before proposing the name, it is always good to check the availability of the name on MCA portal.
- Step 4:Here in this step Incorporation of LLP take place
- The form for incorporation of LLP incorporation shall be filed and submitted along with all needed documents to the Registrar of the state in which the registered office of the LLP is located.