As per Section 2 (n) of the Limited Liability Partnership Act 2008 "limited liability partnership" means a partnership formed and registered under this Act;
as per Section 2 (o) "limited liability partnership agreement" means any written agreement between the partners of the limited liability partnership or between the limited liability partnership and its partners which determines the mutual rights and duties of the partners and their rights and duties in relation to that limited liability partnership.
- Limited liability partnerships (LLPs) allow for a partnership structure where each partner's liabilities is limited to the amount they put into the business.
- Having business partners means spreading the risk, leveraging individual skills and expertise, and establishing a division of labor.
- Limited liability means that if the partnership fails, creditors cannot go after a partner's personal assets or income.
- LLPs are common in professional business like law firms, accounting firms, and wealth managers.
Minimum number of Members
Minimum 2 Members
Maximum Number of Members in a Limited Liability Partnership
There is not limit for Maximum Number of members
One of the Partners of Limited Liability Partnership should be resident of India satisfying the conditions of total stay prescribed by Government.
Minimum Capital Requirement
Minimum Capital Requirement for a LLP is Rs. 1 Only
Name of LLP
A unique name not related to any other existing Company must be suggested.
- The LLP name must be easy to remember, simple and short.
- It must not be offensive to any caste, religion, race, community and society.
- It must not be against the public policy and not against the governments.
-The name must not be similar to any other existing LLP
- The LLP name must not have any prohibited word against any law prevailing in India
Registered office of LLP
For Registered office of LLP address proof is required. If it is a rented premises No Objection Certificate of Landlord is necessary.
1. Appointment of Nominated Partner and Designated Partners who will file form
2. Apply for Digital Signature Certificate
3. Apply for Designated Partner Identification Number (DPIN)
4. Apply for Name availability and approval
4. Documents for LLP Registration
5. Drafting LLP Agreement
6. Apply of LLP Registration Certificate
7, Apply for PAN and Tax Deduction Account Number (TAN)
8. Open Bank Account in the name of the LLP
- Designated Partner Identification Number (DPIN)
- DSC or Digital Signature Certificate of the designated directors
- Limited Liability Partnership Deed
To Incorporate a Limited Liability Partnership the following documents are necessary:
- PAN card details of all the partners
- Identity Proof such as Aadhaar card, PAN card, Driving License, Voter Id of all the designated and nominated partners;
- Address Proof of all the proposed partners of the LLP.
- Obtain No Objection Certificate from the landlord of the business place.
- DSC or Digital Signature Certificate of the designated partners
- DPIN or Designated Partner Identification Number of all the designated Partners
- Passport in the case when a partner is NRI or foreign national
- Utility bill such as telephone, gas, water or electricity bill of the registered office as a residential proof of the business place. It should not be older than 2 months.
For Foreign Nationals
It is mandatory for Foreign Nationals to submit notarized copy of the passport. The residence proof documents like a bank statement or electricity bill must be less than two months old.
Benefits of Registering Limited Liability Partnership
- LLP carries all good advantages of the Partnership Firm and Private Limited Company
- LLP has less cost of compliances than of the Company.
- LLP is exempt from taxes like Surcharge, and Dividend Distribution Tax.
- LLP has Limited Liability which is beneficial for the business
- There is less cost in the incorporation of the LLP
- There is no audit requirement up to 40 lakhs in the LLP
- As per Section 35 of the LLP Act 2008, the LLP has to file Form 11 with ROC for Annual Return within 60 days. In case of the non-filing, Rs 100 per day is charged as penalty.
- As per Section 34 of the LLP Act 2008, the LLP has to file Form 8 for a statement of Account and Solvency within 30 days. In case of the non-filing, Rs 100 per day is charged as penalty.
- The LLP has to file an income tax return in ITR 5. If in case of the
non-filing of the return, the penalty is levied on the LLP.