Limited Liability Partnership (LLP) was first established in the Limited Liability Partnership Act of 2008. The cause it was established was to provide a form of businesses that was easy to carry and it providing support to the owners by providing them with limited liability.
The advantage of opting for a Limited Liability Partnership over the traditional Partnership Firm is that an LLP provides each partner limited liability. This means that one partner is not taking in charge for the conduct and negligence of another partner. This is somewhat similar to what shareholders enjoy. Another character is that in an LLP, all partners have the right to operate the business directly.
Registering an LLP is one of the simplest processes in India. The compliance and procedures are easy and taking a short time to complete. This is the primary reason that many are opting for this type of business, especially small and micro business. Solubilis is a top leader in Limited Liability partnership Registration (LLP). It supports customers complete the process in 20 days and ensures them of quality service. Other than the LLP registration, Solubilis can also provide you with company registration, business registration, private registration and providing other corporate services like trademark registration, patent registration, Copyright Registration, ISO registration, FSSAI registration, Logo registration, Design registration, Brand name registration etc., For more details, schedule an appointment with one of our consultants now itself and they will support you take the procedure of an LLP forward.
The LLP Registration Process is same as to the Private Limited Company incorporation procedure, except for a few simple things. The process is very easy and you can do it through online, so you don’t even want to leave your home to get your company or organization or LLP registered within 20 working days. With Solubilis, you can obtain the entire process completed in just 20 days. Our experts will provide guidelines for you the necessary and all the important things you need to know about LLP Registration.
Solubilis can support you obtain your limited liability partnership Registration done in all leading major cities of India like Chennai, Bangalore, Hyderabad, Cochin, Coimbatore and all the other major cities of Tamilnadu. For your clarification, a detailed explanation of the process is mentioned below.
The fundamental step is to get DSC of the required partners of the Limited Liability Partnership. The reason for this is that all the forms require to be submitted online and need the director’s digital signatures which are essential to sign the electronic documents.
The law also needs that all directors apply for a DIN number. The application for DIN number has to be created in Form DIR- 3.
This process includes registering the Limited Liability Partnership. Before you do this, you would require to conform if the name is already taken or not. You can check the name availability through the free search on the MCA portal. The registrar only has the rights to approves LLP names, if that are not taken before.
Once you have your suggested name, that is not registered already, you require having the Memorandum & Articles of Association (MOA) and Articles of Association (AOA). The next step is to submit the MOA and AOA with the help of MCA. You require to fill up the form 2 having all the details appropriately. The form also wanted one DIN of any of the directors presented in the form. The procedure provides 15 days to complete.
Once the registrar approves your MOA and AOA, you are nearer to getting your LLP registered. The next step is to get the LLP Incorporation Certificate. You can do by submitting all required documents to the registrar. The time period required for this process is between 2- 12 days. Once you obtain your LLP Incorporation Certificate, you’re move to the next step.
Below are the government fees for filing forms:
|Step 1 – DSC||Around Rs. 1500-2000 for 2 directors(varies with respect to the agency)|
|Step 2 – DIN||Rs. 1000 for 2 partners|
|Step 3 – Name Reservation||Rs. 200|
|Step 4 – Incorporation||According to capital contribution.Contribution up to Rs. 1 lakhs – Rs. 500,Contribution between Rs. 1 and 5 lakhs – Rs. 2000|
|Step 5 – LLP Agreement||According to capital contribution.Contribution up to Rs 1 lakhs – Rs 50 for filing Form 3 and stamp duty based on the state where LLP is incorporated|
LLP incorporation starting from acquiring DSC to Filing Form 3 requires approximately 15 days with respect of all the documents submitted correctly.
Now, obtain your business registered as a Limited Liability Partnership using Solubilis. Let our experts manage your taxes and business compliances, while you registering your LLP or company.
An LLP may be incorporated by two or more legal persons (for example individuals, limited companies, LLPs, corporations etc) for maintaining on a lawful business with a clear view to profit.
To incorporate an LLP form LL IN01 should be completed and sent to the registrar of companies together with the prescribed registration fee. The form may be submitted electronically, where an account is held with Companies House to process the payment, or by post. Electronic submission is slightly cheaper and makes your process easier and applications are normally processed within 24 hours. Paper documents must involve a cheque or postal order and are generally processed within 5 days of receipt.
Before filing the incorporation document all members and nominated members must sign and date the incorporation document to conform their agreement to act. The incorporation document certifies that two or more persons named on the form are associated for carrying on a lawful business with a view to profit. Part 3 of the incorporation document must be signed by a proposed member or a solicitor. Anyone signing the document which consist a statement which they know is, or believe to be, false commits an offence.
The incorporation application form LL IN01 needs the provision of the following information:
There are some restrictions and limitations placed on the name an LLP can register, either on incorporation or by a change. An LLP cannot use a name:
The utilization of particular words, for example “Fund”, “Inspectorate”, “Royal”, “Reassurer”, “British” etc., need agreement of the relevant appropriate organization or the Secretary of State before they can be used in an LLP’s name. The name of an LLP must end with the words “Limited Liability Partnership” or its Well-equivalent or their accepted abbreviations (LLP or PAC).
The Secretary of State may instruct an LLP to modify its name if it is somewhat similar to an already existing name. A failure to modify the name as instructed is a criminal offence. The Secretary of State may also instruct the LLP to modify its name if the information given to the registrar of companies is misleading. A failure to modify the name as instructed is a criminal offence. Where the Secretary of State believes that the name is misleading in accordance with the activities suggested or if there is a likelihood of this causing harm to the public he/she may direct the LLP to change its name. A failure to modify the name as instructed is a criminal offence. However the LLP has the right to appeal to the court to modify this decision.
An LLP may be required to change its name and to register the change with the registrar of companies if an objection that the name is similar to another on the register is upheld by the company names adjudicator. If the LLP does not comply with an order to change its name the company adjudicator may determine a new name for the LLP.
An LLP may modify its name at anytime and anywhere. Where the name is modified the notice of modification should be transmitted to the registrar of companies.
A modification of name has no effect on the rights or duties of the LLP nor does it have any effect upon any legal proceedings which may have been initiated. Any legal proceedings would simply continue in the new name or identity of the LLP.
The name of the LLP must be displayed at the registered office or place at which it carries on business in features that can be read easily and be seen readily by any visitor. The “office” of a member of an LLP working from his/her home address is excluded unless it is also the LLP’s registered office location.
An must provide its full name (as it appears on the certificate of incorporation, see on all business letters and other documents, for example notices, official publications, cheques, invoices, receipts, etc and on any websites it having. In addition an LLP must provide on its business letters, order forms and on its websites the address of the registered office, the part of the United Kingdom in which it registered, England and Wales, Wales, Scotland or Northern Ireland and the LLP’s registered number.
The incorporation document (which is filed in Form LL AP01) provides the names, nationality, date of birth, business occupation and a service address or business location for each member. The service address may be registered as the LLP’s registered office. The LLP is wanted to keep a register of members which also includes this information. The incorporation Document which is filed in Form LL AP01 also includes the member’s usual residential address, although this information will not be kept on the public register unless disclosed as the service address or the registered business location. The registrar of companies may include the member’s residential address to a credit reference agency or a public. The Insolvency Service is involved within the definition of a specified public authority.
The registrar of companies may disclose a member’s residential address on the public register if communications requiring a reply within a specified time period balance to undetailed or there is evidence that sending documents to a member’s service address is not efficient. The registrar of companies must provide notice of his/her intentions to the member and to every LLP of which the individual is a member. The registrar of companies must consider into account any representations made by the member before putting his/her residential address on the public register. The legislation does not mention time periods for the issue of the notice and receipt of representations from the member.
If the registrar of companies decides to publish the member’s living address on the public register he/she must state that address as the member’s service address and that the usual residential address is the same as the service address. The registrar of companies must give notice to the member and to the LLP. The LLP must enter the residential address as the service address in the register of members. If the member mentions the LLP of a more current residential address, it must provide that address in the register of members as the member’s service address or business location and mentions the registrar of companies of the modification. Failure to comply is a criminal offence and the LLP and every nominated member in default is liable on summary conviction to a fine and a daily default fine for continued contravention. If a member’s residential address has been put on the public record by the registrar, he/she cannot register a service address, other than his/her usual residential address, for a period of 5 years.
An LLP is wanted to keep a register of individual members’ residential addresses. Failure to comply is a criminal offence and the LLP and every nominated member in default is liable on summary conviction to a fine and a daily default fine for continued contravention.
An LLP must have a business location as registered office where notices, letters, etc. can be delivered. The location of the registered office is found by the members and any modification is made by resolution of the members.
The location of the registered office must be prescribed on the incorporation document. The LLP must mention whether the registered office is in England or Wales, Wales, Scotland or Northern Ireland. A modification of registered office must be indicated to the registrar of companies and signed by a nominated member of the Limited Liability Partnership. The alteration in address takes effect upon the notice being registered by the registrar of companies. The registrar of companies uses the Post Office address file to check the validity of each application for the use of an address as the registered office.
The registrar will provide a certificate of incorporation if all the appropriate needs have been fulfilled. The certificate is conclusive evidence that the Limited Liability Partnership is incorporated by the name prescribed in the incorporation document. The certificate provides the name of the LLP, its registered number (which commences with the prefix “OC”. The “OC” stands for other company to provide that is an LLP rather than a limited company), the date of incorporation and whether the registered office is in England and Wales, Wales, Scotland or Northern Ireland. The certificate must be signed by the registrar or authenticated by his/her official seal.
The minimum number of partners to form an LLP is 2. There are no upper limitations on the maximum number of partners of LLP. Among the partners, there should be minimum two nominated partners who shall be individuals, and at least one of them should be resident in India and other may be NRI. The rights and responsibilities of designated partners are governed by the LLP agreement. They are directly responsible for the compliance of all the provisions of LLP Act 2008 and provisions prescribed in Limited Liability Partnership agreement.
An LLP is a separate legal entity. This defines that it has properties in its own name and can appeal and be appealed. However, one partner is not taking responsibility or liability for another designated partner’s misconduct or negligence.
An LLP has designated partners, who own and operate the business. This is somewhat different from a private limited company, whose directors may be different from shareholders. For this reason, VCs do not ready to invest in the LLP company structure.
The partners are free to draft the agreement as they required, with respect to their rights and responsibilities.
The liability of the partners is limited to the range of his/her contribution to the Limited Liability partnership. Unless fraud has been detected, the personal assets of the partner are prevented from any liability of the LLP.
An LLP is much easier and cheaper to operate than a private limited company as there are just three compliances per annum. On the other hand, a private limited company has a lot of compliances to meet their requirements and conduct a tax audit of its books.
Not only is it simple to initiate, it’s also easier to wind-up an LLP, as compared to a private limited company. Whether it still requires two to three months to do this process, it can take over a year to close a private limited company.
VCs do not ready to invest in the Limited liability partnership company structure. This is because all ‘shareholders’ in an Limited Liability Partnership must be designated partners, which have certain duties toward the entity. No VC requires any of these responsibilities, and would, therefore, only they desires to invest in a private limited company.
An Limited Liability Partnership can be structured in such a way that one partner has more rights than another designated partner. So it isn’t a one vote per share system. So, some lesser partners may feel compromised if higher shareholders select to move the business in a direction that affects their interests and investments.
An Limited liability partnership’s drawbacks are minimal, but if you don’t complete them, you could end up paying more in fines than you would with a private limited company. These fines can grow up to Rs. 5 lakh for a single financial year.
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