LIMITED LIABILITY PARTNERSHIP (LLP)
Limited Liability Partnership (LLP) was introduced in India by way of the Limited Liability Partnership Act, 2008. The basic premise behind the introduction of Limited Liability Partnership (LLP) is to provide a form of business entity that is simple to maintain while providing limited liability to the owners. Since, its introduction in 2008.
The main advantage of a Limited Liability Partnership over a traditional partnership firm is that in a LLP, one partner is not responsible or liable for another partner’s misconduct or negligence. A LLP also provides limited liability protection for the owners from the debts of the LLP. Therefore, all partners in a LLP enjoy a form of limited liability protection for each individual’s protection within the partnership, similar to that of the shareholders of a private limited company. However, unlike private limited company shareholder, the partners of a LLP have the right to manage the business directly.
LLP is one of the easiest forms of business to incorporate and manage in India. With an easy incorporation process and simple compliance formalities, LLP is preferred by Professionals, Micro and Small businesses that are family owned or closely-held. Since, LLPs are not capable of issuing equity shares, LLP should be used for any business that has plans for raising equity funds during its lifecycle.
The average time taken to complete a LLP registration is about 7 – 10 working days, subject to government processing time and client document submission.
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REASONS TO REGISTER AN LLP
- Identity Proof of Partners: PAN Card for Indian Nationals & Notarised Passport Copy for Foreign Nationals.
- Address Proof of Partners: Passport, Drivers License, Aadhar Card and Copy of Electricity Bill, Water Bill, Telephone Bill, Bank Statement (Any of these documents shall not be more than 2 months old).
- Proof of Registered Office: Rent Agreement or Sale Deed and Copy of Electricity Bill, Property Tax Receipt, NOC from Land Owner to use premises as Registered Office.
- Signed Incorporation Documents: Signed Digital Signatures Application Documents in Hard. Other documents signed and uploaded in soft copy.
- Identity Proof: PAN Card for Indian Nationals & Notarized Passport Copy for Foreign Nationals.
- Address Proof: Passport/Driving License/ Aadhar Card/ Voter id Card and Copy of Electricity Bill/ Water Bill/ Telephone Bill/ (Any of these documents shall not be more than 2 months old).
- Proof of Registered Office: Rent Agreement or Sale Deed and Copy of Electricity Bill/ Property Tax Receipt and NOC from Land Owner to use premises as Registered Office.
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FREQUENTLY ASKED QUESTIONS
How many people are required to incorporate a LLP?
To incorporate a Limited Liability Partnership, a minimum of two people are required. A Limited Liability Partnership must have a minimum of two Partners and can have a maximum of any number of Partners.
What are the requirements to be a Partner in a LLP?
The Designated Partners needs to be over 18 years of age and must be a natural person. There are no limitations in terms of citizenship or residency. Therefore, the LLP Act 2008 allows Foreign Nationals including Foreign Companies & LLPs to incorporate a LLP in India provided at least one designated partner is resident of India.
What is the capital required to start a Limited Liability Partnership?
You can start a Limited Liability Partnership with any amount of capital. There is no requirement to show proof of capital invested during the incorporation process. Partner’s contribution may consist of both tangible and/or intangible property and any other benefit to the LLP.
Can an LLP be incorporated for undertaking "Not-For-Profit" activities?
No, one of the essential requirements for setting LLP is ‘carrying on a lawful business with a view to profit’. Therefore, LLP cannot be incorporated for undertaking “Not-For-Profit” activities.
Is an office required for starting a Limited Liability Partnership?
An address in India where the registered office of the LLP will be situated is required. The premises can be a commercial / industrial / residential where communication from the MCA will be received.
How long will it take to incorporate an LLP?
We can incorporate a Limited Liability Partnership in 7-10 working days. The time taken for incorporation will depend on submission of relevant documents by the client and speed of Government Approvals. To ensure speedy incorporation, please choose a unique name for your LLP and ensure you have all the required documents prior to starting the incorporation process.