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LLP Registration

Create Limited Liability Partnerships (LLP) – In Most Easiest and Simpliest Way

Limited Liability Partnerships (LLPs) are commercial vehicles that has in-built features of both ‘Private limited Company’ Create partnership firmsand ‘Typical Partnership Firms’.  A Limited Liability Partnership combines the advantages of both the Company and Partnership into a single form of organization. The LLP Act is not restricted to any specific business services or segments such as  professionals like CA / CS / Lawyers, but actually can be used by any business form.

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FAQ on Incorporation of Limited Liability Partnership (LLP) In India

What are the salient features of LLP?

  • It is a separate legal entity with perpetual succession. Thus it is capable of entering into contracts and holding property in its own name.
  • Partners are severally liable for any unauthorized acts done during the course of the business unlike Partnership firms, where partners are jointly and severally liable for all the claims against the firm.
  • Every limited liability partnership shall have either the words “limited liability partnership” or “LLP” as the last words of its name.
  • A minimum of two partners will be required and there will not be any limit to the maximum number of partners.
  • Every Designated Partner would be required to obtain a “Designated Partner’s Identification Number” (DPIN) OR “Director’s Identification Number” (DIN).

What is the difference between LLP and a Partnership Firm?

Under “partnership firm”, every partner is liable, jointly and severally for all acts of the firm done while he is a partner.
Under LLP structure, liability of the partner is limited to his agreed contribution.  Further, no partner is liable on account of the independent or un-authorized acts of other partners unlike in partnership firm.

What are the benefits of forming Limited Liability Partnership?

  • Easy formation.
  • No detailed legal and procedural requirements.
  • No requirement of minimum capital contribution.
  • No restrictions as to maximum number of partners.
  • Partners are not liable for Act of other partners.
  • Personal assets of the partners are not exposed except in case of fraud.
  • Easy to dissolve or wind-up.
  • Professionals like CS / CA / CWA / Lawyers can form Multi-disciplinary Professional LLP.
  • Statutory records except Books of Accounts are not required to be maintained.
  • Simple process of registration (compared to a Company).

Who can be a “Designated Partner” and what are its requirements?

Appointment of at least two “Designated Partners” is mandatory for all LLPs. And both shall be individuals and at least one of the Designated Partner shall be a resident of India. In case of a LLP in which either one or all the partners are bodies corporate, then at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.

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When does audit becomes mandatory in case of LLP?

‘LLP’ is required to get their books of accounts audited when the total revenue is more than INR Rs. 40 lacs or total capital of partners exceeds INR Rs. 25 lacs.

Whether LLPs would be required to maintain books of accounts?

An LLP shall be under an obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A “Statement of Accounts and Solvency” in prescribed form shall be filed by every LLP with the Registrar every year.

Whether annual return would be required to be filed?

Every LLP would be required to file with ROC an Annual Return every year.

What are the registration formalities relating to LLPs?

Every LLP shall have a registered office and it shall be registered with the ROC. An incorporation Document subscribed by at least two partners shall have to be delivered to the Registrar in form 2. Every LLP so registered shall be assigned a LLP identification number (LLPIN).

Whether other business entities would be able to convert into LLP?

The LLP Act contains such provisions wherein it is stated that entities like firm or company can convert themselves into LLP.

Can a Non Profit Organization form LLP?

No. The essential requirement for setting LLP is carrying on a business with a view to make “profit”.

Whether e – filling of documents with ROC would be allowed?

Yes, the filling and inspection of documents can be done online through the website

Which documents will be available for public inspection?

Incorporation document, Names of partners and changes, if any, Statement of Account and Solvency, Annual Return are the documents that will be available for inspection.

Can a foreign LLP reserve its existing name while registering in India?

A foreign LLP can reserve its existing name by which it is registered in the country of its incorporation by making an application to Ministry of Corporate Affairs. The reservation will be valid initially for three years and is renewable thereafter.

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