Limited Liability Partnership is a different corporate business structure that combines a company's limited liability protections with a partnership's flexibility. For example, it can remain even if one of its partners changes. It can also hold assets in its name, enter into contracts on its behalf, and is liable for all its assets. However, the liability of the partners is only as significant as their agreed-upon investment in the LLP. Furthermore, none of the partners is liable for the independent or unlawful conduct of the other partners. Individual partners are therefore protected from joint liability brought about by another partner's bad business choices or wrongdoing.
In an LLP, the partners' mutual obligations and rights are governed. An agreement between the partners, or between the partners and the LLP, as the case may be, regulates the mutual rights and obligations of the partners within an LLP. Nonetheless, the LLP is still responsible for fulfilling its other obligations as a separate legal organization.
LLP is referred to as a hybrid between a company and a partnership since it has aspects of both a corporate structure and a firm partnership structure.
Features of Limited Liability Partnership:-
- It has a separate legal entity, just like companies.
- The liability of each partner is limited to the contribution made by the partner.
- The cost of forming an LLP is low.
- Less compliance and regulations.
- No requirement for minimum capital contribution.
LLP REGISTRATION ONLINE
The steps to register a limited liability partnership online are as follows:-
1. Obtain Digital Signature Certificate (DSC)
You must apply for the designated partners of the proposed LLP's digital signature before starting the registration process. This is due to the fact that all LLP paperwork must be digitally signed and filed online. Therefore, the selected partner must acquire their digital signature certificates from certifying bodies that the government approves.
2. Apply for Director Identification Number (DIN)
All designated partners or those planning to become designated partners of the proposed LLP must submit applications for their DINs.
You must attach scanned copies of the required documents (often Aadhaar and PAN) on the form. In addition, the application must be signed by either the Managing Director, Director, CEO, or CFO of the existing company in which the applicant will be appointed as a director or by a company secretary who works full-time.
3. Name Approval
The Limited Liability Partnership-Reserve Unique Name (LLP-RUN) form is submitted to reserve the name of the proposed LLP, and the Central Registration Center under the Non-STP category will handle it.
4. Incorporation of LLP
The FiLLiP (Form for incorporation of Limited Liability Partnership) is the document used for incorporation, and it must be filed with the Registrar, who has jurisdiction over the state where the LLP's registered office is located. The form is going to be incorporated.
5. File Limited Liability Partnership (LLP) Agreement
Documents Required for limited liability partnership
- PAN Card
PAN Card of each partner, if there's any foreign national may provide a passport
- Partners Address Proof
Aadhar Card/ Voter ID/ Passport/ Driving License of each partner
- Photograph
Passport-size photograph of each partner
- Business Address Proof
Electricity Bill/ Telephone Bill of the registered office address
- NOC from the owner
No Objection Certificate is to be obtained from the owner of the registered office
- Rent Agreement
Rent Agreement of the registered office should be provided, if any
LIMITED LIABILITY PARTNERSHIP REGISTRATION IN INDIA
An alternative business structure that combines a company's benefits with a partnership firm's adaptability is known as an LLP Registration in India. The Limited Liability Partnership Act of 2008 brought the LLP concept to India. Small- and medium-sized business establishments can use this unique hybrid.
In India, managing and forming a Limited Liability Partnership is simple. A minimum of two partners are needed to register an LLP; there is no maximum. The Partners' obligations and rights are outlined in the LLP agreement. One partner in an LLP is not liable for the wrongdoing and carelessness of the other partner. The partners are accountable for adhering to all the mentioned provisions in the LLP agreement.
Benefits of LLP registration in india
- Partners' Liabilities are Limited
The fact that a Limited Liability Partnership counts as an independent legal identity is the primary benefit of registering as one as opposed to a Partnership Firm. As a result, LLP offers its partners the benefit of restricted liability. According to the LLP agreement, the partners' liability in case of a business loss or insolvency is limited to the capital contribution. Furthermore, neither partner is accountable for the negligence or misbehaviour of the other partner.
- Separate Legal Existence
Registering a limited liability partnership gives it a distinct legal identity from its partners. It can enter into agreements with other legal entities, file lawsuits, possess property, and take out loans in its name, thanks to the LLP Act of 2008. It also enables the company to continue operating independently and indefinitely, regardless of partner changes or deaths.
- Operational Flexibility
The functional structure of an LLP, including the rights and obligations of the partners, is described in the LLP Agreement, a deed between the partners. The "Designated Member" who oversees daily operations is the norm for LLPs. Additionally, it may have members who are already established individuals or companies. Also, this structure enables us to identify the partners' roles and obligations clearly. Additionally, it might aid in defending the partner's interest in the event of loss brought on by another partner's illegal behavior.
- Lower Compliance Requirement
Compared to Private Limited Businesses, LLPs have fewer compliance responsibilities. An audit is only required once a specific amount of turnover or contribution is completed. Unlike corporations, LLPs are exempt from compliance requirements pertaining to board meetings, statutory meetings, etc. Professional compliance services are frequently more affordable than those for businesses, making this type of formation more affordable to maintain