A limited Liability Partnership is a legal corporate body that is a fusion of benefits of a company and the flexibility of partnership firms.
It is governed under the LLP Act 2008 and is registered by ROC (Registrar of Company). Its purpose is to serve satisfaction and ease to entrepreneurs, professionals, and enterprises for whatever they aim to give out to the economy.
It has more freedom in terms of rights and duties between the partners, unlike other businesses. LLP is an artificial legal person. It has some allotted rights by the legal process. It is invisible and immortal but works as an individual with its own identity. The partners of LLP can manage their business on their own terms but are responsible for legal compliance.
Governance of law for LLP in India
As LLP has the governance of the Limited liability partnership Act, 2008. It says Any private company or partnership firm has the freedom to convert itself into LLP. All the partners and shareholders have to follow the rules and regulations for the firm which are regulated by the provisions of the act. Mutual rights and duties are also mentioned in the provision of the LLP Act 2008. And it is commenced on the basis of an agreement between partners. It has to maintain a book of accounts each year on any basis. If the company gets sued, no partners are liable to fulfill the amount of loss.
Features of LLP in India
It has more features and has been given so many beneficiaries, unlike other companies.
- Partners– Partners of the company must be at least 2 but have no limits on maximum. One partner must be from India. Foreigners are also allowed to be partners.
- Perpetual succession- These companies have perpetual succession. It doesn’t get affected by any partner’s resignation or death. They can continue their existence irrespective of any changes.
- Limited liability– In LLP, Companies’ assets may get used to clear liabilities but assets of partners won’t get affected in any way. Their liability is limited only to their contribution to the company.
- Compliance- It has less compliances than some other companies. It is mandatory to file a return irrespective of any other factor. LLP has the requirements of three compulsory compliances.
- Separate legal entity- It creates their own entity under the vision of laws. It has its own identity and could hold all its assets and liabilities in its own name. It has the capability of entering into contracts on its own name.
- Common seal- It remains under the custody of any responsible and mature official. It is a type of firm’s signature. It only gets affixed with the appearance and consent of at least 2 designated partners.
Advantages of Limited Liability Partnership
- No partner is liable for unwanted actions of other partners under any conditions.
- It works on the basis of a contractual agreement which is put together with the consent of all the partners.
- It has too much flexibility. It doesn’t have a major organization and is easy to handle.
- Partners have agreed on ratio for the share of profits as well as for losses.
- It has a very nominal registration cost.
- Dividend distribution tax is not applicable to LLP.
Disadvantages of Limited Liability Partnership
- LLP has lack of secrecy. They have to show up their professional statements and documents to the central government as well as to the public.
- They also have legislative uncertainties. They may get to make changes in their company because of changes made by law in the economy.
- Legal formalities necessarily have to be done without any delay.
- It has higher income tax rates. And gets no tax benefits to partners.
The Registration Process of LLP Online by JustStart in Only 8 Steps
The registration process has been very easy to do now. The online procedure has the ease one would ask. It is also a very time-saving process with the least fees.
Visit the website of Ministry of Corporate Affairs i.e., www.mca.gov.in
It has the mandatory requirement of choosing your business user role and further has to obtain for Digital Signature Certificate (DSC)
Apply for Digital Identification Number (DIN). It is compulsory the identification the partners.
Select your type between business users or registered users. Choose whatever is convenient to you.
Login to your account for further procedures.
Put in your approval for the proposed name of the company to RUN. And also mention the purpose of the company.
Check out the code of your industry of work and fill it up in the form. Then, pay the minimal government fees.
Additionally, fill in all the company details and the partners details which would be asked. And submit it for the approval of incorporation.
Documents Required for Registration of LLP Online in India
LLP has to go through a strict documentation process but it is very easy to do so. And also very convenient for any applicant.
- PAN Card along with the Aadhaar Card of all the partners’.
- Address proof of the registered office and also of partners.
- NOC of rental office from the owner itself (in any) with a copy of the agreement of rental place.
- Latest utility bills such as telephone bills or electricity bills.
- LLP Subscriber Sheet which needs to be witnessed by any professionals. It has the name of partners, address, profession, and such.
If you want to set up a Limited Liability Partnership and want to know the Steps to Register Into a Limited Liability Partnership in India then make sure you are aware of your objective. Choose your partners wisely and in a very clever way. Know all the terms and conditions applied to LLP in India. Get the help of professionals for the whole box of knowledge for the commencement of it.
JustStart is continuously working to provide you with the best professional knowledge. We provide very high demanding consultancy on business and its execution. We help to resolve your doubts and for the commencement of your dreams. JustStart has qualified Professionals for the Start up Business Consultancy and we are proud of the results and reviews that we are getting for our clients.