LLP Registration in India has become an alternative form of business that provides the advantages of a Company and the flexibility of a Partnership firm into a single organization. The Concept of LLP in India was introduced back in 2008 by the Limited Liability Partnership Act of 2008. This unique hybrid is suitable for setting small, medium-sized businesses.
It is very easy to manage and incorporate a Limited Liability Partnership in India. To register an LLP minimum of two partners are required, there is no upper limit as such. The LLP agreement states the rights and the duties of the Partners. In an LLP one partner is not responsible for the misconduct and negligence of the other partner. The partners are responsible for the compliances and all the provisions that are specified in the LLP agreement.
For incorporating an LLP in India:
A minimum of two partners are required.
The Digital Signature Certificate is required for all designated partners.
DPIN for all designated Partners.
The name of the LLP should be such that it is not similar to the name of any existing LLP or Trademark registration.
Capital contribution by the Partners of the LLP.
LLP Agreement between the Partners.
Proof of registered office of the LLP.
The whole process to get an LLP registered in India with TAXAJ is very easy. You need to follow these 10 steps.
Once we receive your request an engagement reaches you, explains the whole process, and collects the necessary documents.
The documents can be submitted online through our TAXAJ website or mobile application.
The received information is then verified and the process to obtain the Digital Signature Certificate of the applicant begins.
Once the DSC is the applicant has to complete the OTP Verification or the video KYC check.
A request is filed with the MCA for reserving the name of the LLP.
On receiving the documents the incorporation documents are drafted and sent to the partners for signatures.
A scanned copy of the documents is to be uploaded on the TAXAJ platform.
The signed documents along with the application are then sent for approval to the MCA which takes around 2-5 working days.
We also help in opening a bank account in the name of the LLP, in parallel to this we draft the LLP Partnership deed. This deed is signed by all the partners and on a stamp paper which has to be then uploaded to the TAXAJ platform within 25 days of Incorporation.
The Signed deed is then verified by the engagement manager and uploaded on the MCA Portal within 30 days of incorporation.
There are several reasons why people opt for LLP registration in India over Private Limited Company incorporation. LLPs are considered to be easier to set up and flexible form of business. Entrepreneurs find it feasible to start their organization as it is comparatively hassle-free in day-to-day operations. Here, we take a look at the various advantages of LLPs.
Low registration cost: The cost of registering an LLP in India is comparatively lower than that of incorporating a public limited company or a private limited company.
No requirement for minimum contribution: As an LLP can be formed with the least possible capital, there is no minimum capital requirement in the incorporation of an LLP.
No limits on the owners of the business: An LLP requires a minimum of 2 partners but there is no such upper limit on the maximum number of partners. Whereas in a private limited company there are restrictions on having more than 200 members.
No requirement of compulsory audit: Whether the company is Public or Private irrespective of their share capital is expected to get its account audited. But here in the case of LLPs, there is no such mandatory requirement and this is considered to be one of the significant compliance benefits of forming an LLP. A Limited liability company is supposed to get its audit done only in two cases.
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Taxation aspect on LLP: LLP is liable for payment of income tax and the share of the partner is not liable to taxation. Thus, no Dividend Distribution Tax (DDT) is payable.
The main purpose of introducing LLP in India is to introduce a form of business that provides limited liability to the owners and is comparatively easy to manage and hassle-free. It is an alternative to Partnership firms. Here, we take a look at the major differences between an LLP and a partnership firm.
At TAXAJ LLP registration can be done online starting Rs.7899, whereas Partnership registration can be done at just Rs. 4999.
In an LLP the partners are not responsible to the creditors externally. Hence, the partners are liable to the extent of their contribution to the LLP. On the contrary, in the case of a partnership firm the partners are personally responsible to the creditors. Because of this entrepreneurs may deny being partners in the partnership firm. In an LLP the partners enjoy limited liability protection.
LLP and partnership firms both must have a minimum of 2 partners. However, there is no upper limit in the number of partners in an LLP. Just in case if the number of partners reduces below 2 in a partnership firm due for any reason the firm would stand dissolved. Whereas in the case of LLPs if the number of partners reduces below 2, the sole partner can find a new partner without actually dissolving the LLP.
An LLP can shift its registered office and open a bank account anywhere in India as it is registered under the Ministry of Corporate Affairs of India.
The Registrar of firms that registers the partnership firms is controlled by the state government. Hence, it is more tedious to operate or move across India with Partnership firms.
The subsistence of LLP does not depend on its partners. The partners of the LLP can change from time to time, but that will not affect the existence, continuity, or operations of the LLP.
In the case of a Partnership firm, the resignation or death of any partner would have huge consequences and the Partnership would have to be reconstituted.
Members can be added to LLP during incorporation or post incorporation. The following persons can be partners in LLP:
The LLP agreement must be executed and filed within 30 days of incorporation of an LLP. If the LLP fails to file the agreement, then there is no agreement and the First Schedule of the LLP Act will administrate the relationship between the Partners and LLP.
In case there is written agreement and no detailed declaration about any of the matters dealt with in the first schedule, such matters will be administered by the first schedule.
Entrepreneurs starting a new business are always curious to know the difference between a Private Limited Company and an LLP, as both of them offer similar features. Here's the comparison between a Private Limited Company and an LLP from an entrepreneur's perspective for starting a new business.
Registration process: The processes for Private Limited Company registration and LLP Registration are very similar with some differences in the documents and the forms that are filed for incorporation.
Following are the steps involved for the incorporation of a Private Limited Company as well as an LLP.
Cost of Registration: The LLPs have been designed to meet the needs of small businesses and hence, the incorporation fee for an LLP is comparatively cheaper than that of a Private Limited Company. LLP registration requires a lesser number of documents that need to be printed on Non-Judicial stamp paper as compared to the Private Limited Company Registration. Through TAXAJ a Private Company can be registered at just Rs.6899 online here.
Features: Similar features are offered by LLP and Private Limited Company. Both being separate legal entities have assets and liabilities that are separate from that of the promoters. Even though both LLP and Private Limited companies are transferrable, a Private Limited Company offers more flexibility when it comes to transferring or even sharing ownerships. Unless closed by the promoters or by a competent authority both Private Limited Company and LLP have a perennial life.
Ownership: In LLP the partners hold the ownership as well as the powers to manage and control the LLP. Therefore, a Partner in LLP will play a very significant role as he will play the role of both owners as well as a manager. In parallel, flexibility is offered to the promoters by a Private Limited Company when it comes to ownership and ownership sharing.
Compliance: For LLP and Private Limited Company the Tax Compliances are similar. LLPs enjoy several advantages when it comes to Compliances relevant to the Ministry of Corporate affairs. An LLP doesn't need to have its account audited if the annual turnover of the LLP is less than Rs. 40 lakh and the capital contribution doesn't exceed Rs. 25 lakh. An LLP would however have to file LLP Form 8 and LLP form 11. On the contrary, a Private Limited Company would have to file an annual return with the Ministry of Corporate Affairs each year.
Along with the incorporation of LLP, we at TAXAJ help you to maintain the basic accounting and Compliance of your LLP at a very affordable price. The package starts from Rs.7899 per year. Following are the compliances that an LLP must follow every year.
Income tax return: Income tax return using form ITR 5 must be filed by the LLPs. Form ITR 5 can be filed online through the income tax website using the digital signatures of the designated partner.
MCA annual return: The LLP Form 11 should is due on or before the 30th of May each year. Form 11 contains the details of the number of partners, total number of partners, total contribution received by all partners, details of body corporate as partners, and summary of the partners. Along with this Form, 8 must be filed within 30 days from the end of the 6 months of the respective financial year along with some prescribed fees. Hence, LLP form 8 must be filed before the 30th of October of each financial year.
In addition to this, GST registration, GST return filing, and TDS return filing would be required for the LLP based on the sales and turnover.
TAXAJ is the market leader in LLP registration services in India, also offers a variety of business registration services like Private Company Limited registration, One Person Company registration, Nidhi Company Registration, Section 8 Company Registration, Producer Company registration, and Indian Company registration.