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Limited Liability Partnership

All you need to know

LLP full form: LLP stands for Limited Liability partnership. LLP is a mix of a traditional partnership, and a company as some of its features are similar to a traditional partnership and some matches with a company.
LLP Registration, a prime reason why it has evolved is that of its simplicity in a formation and easy maintenance. It helps owners also to limit their liabilities. This is the biggest advantage of the Limited Liability Partnership over a traditional Partnership Firm.
Incorporating an LLP company has both Limited Liability features of a Private Limited Company and the flexibility of a Partnership Firm. No partner is liable on account of unauthorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s misconduct. LLP form of organization is usually preferred by Professionals, Micro and Small businesses that are family owned or closely-held.

With the introduction of Limited Liability Partnership (Second Amendment) Rules, 2022, MCA has now made LLP registration procedure even more easier and transparent as now all the LLP forms will be web based forms. An LLP can now be incorporated with up to 5 instead of 2 Designated Partners (without DPIN). Also, with the LLP (2nd Amendment) Rules, 2022, LLPs shall be allotted their PAN and TAN along with the Certificate of Incorporation itself. Hence, no need of separate application for PAN and TAN. Procedure of LLP registration is not lengthy as you can file your incorporation form online. Online LLP registration procedure will save you a lot of time and energy. LLP registration process includes following steps:

Obtain Digital Signature
LLP Name Application through RUN-LLP
Incorporation of LLP- Form FiLLiP- (Includes DIN Application and PAN and TAN Application)
File LLP Agreement

Also, there are a few more important changes have been made through LLP (Second Amendment) Rule, 2022, which are as follows:

There can be 5 instead of 2 Designated Partners (without having DIN) at the time of Incorporation.
All the forms of LLP have now become web-based.
LLPs shall be allotted their PAN and TAN along with the Certificate of Incorporation itself.
The Statement of Account and Solvency shall now be signed on behalf of the LLP by its an interim resolution professional.
For filing Consent of Partners, a web-based Form 9 shall be made available.

Government Fees / Cost for LLP registration:

For registration of Limited Liability Partnership, government fees are as below. Note that there are additional costs such as DIN application fees, stamp duties, LLP form filing fees as well:

Limited Liability Partnership whose contribution does not exceed Rs. 1 lakh Rs. 500/-.
Limited Liability Partnership whose contribution exceeds Rs. 1 lakh but does not exceed Rs. 5 lakhs Rs. 2000/-.
Limited Liability Partnership whose contribution exceeds Rs. 5 lakhs but does not exceed Rs. 10 lakhs Rs. 4000/-.
Limited Liability Partnership whose contribution exceeds Rs. 10 lakh Rs. 5000/-.

However, it may vary according to the stamp duties of respective states.
Every LLP is required to have at least two Designated Partners who shall be individuals and at least one of them shall be a Resident of India. The mutual rights and duties of partners shall be governed by the agreement between LLP and the partners. This Agreement would be known as “LLP Agreement”.
info@caagrawalkanhere.com is an eminent business platform and a progressive concept, which helps end-to-end incorporation, Secretarial compliance, Startup advisory, and management consultancy services to clients in India and abroad. Incorporating a Limited Liability Partnership is completely online, easy, seamless, cheapest and quickest with info@caagrawalkanhere.com. Also file your LLP Annual filing with info@caagrawalkanhere.com!
Suggested Read: LLP registration Process and fees in detail.

Compliance required for LLP

All you should know about necessary compliance

GST Registration

Every LLP is required to get their GST registration. GST Registration Process is 100% online and there is no requirement of submission of physical documents to GST Department. GST registration must be obtained within 30 days of business incorporation, otherwise, the LLP will not be able to issue proper GST related invoices.

GST Return

Once a Limited Liability Partnership gets registered under GST It becomes necessary to file GST returns for LLPs. As filing of GST returns is mandatory for all the registered Taxpayers including LLPs. GST returns can be filed monthly, quarterly or yearly depending upon the types of GST returns form you are filing.

Accounting

Every LLP shall maintain and keep the accounting records which sufficient to show and explain the transaction of an LLP and which discloses with reasonable accuracy the financial position of the LLP. The books of account are required to be kept and maintained at the registered office of the LLP for the period of 8 years.

ROC annual filing

LLPs are required to file ROC Form 8 before 30th October every year. Form 8 contains details of the Statement of Accounts and solvency. Also, LLPs are required to file ROC Form 11 before 30th May every year. Form 11 contains details of all the Designated Partners like whether there are any changes in the management of the LLP.

Audit under IT ACT

Every Limited Liability Partnership whose turnover exceeds INR 2 Cr. In case of a business or INR 50 Lakh in case of a profession, is required to get its books of accounts tax audited under section 44AB of the Income-tax Act. Such tax audit under section 44AB will have to be completed and filed by 30th September.

IT Returns

Every Limited Liability Partnership has to file the Income Tax Returns every year, irrespective of its transactions. It must be filed by LLP on or before 31st July (if not covered under audit) or 30th September (if covered under audit). Income tax returns for Limited Liability Partnership have to be filed under ITR 5.

MAT Audit for LLPs

It is mandatory for the LLPs to get their accounts audited under MAT i.e. Minimum Alternate Tax. A report in form 29b is to be issued by a Practicing Chartered Accountant which certifies that MAT has been computed according to Income Tax Act, 1961. The book profit of a company is the accounting profit arrived at after making the specified additions and deductions.

TM Registration

For an LLPs, Trademarks are necessary not mandatory though. The protection of the LLP’s name is limited to the extent that another LLP will not be registered with the same or a closely-resembling name. If you hold a unique brand name it is always advised to get a trademark registered as it is necessary to get protection under different classes of Trademark.

Form 3 CEB for LLP

For LLPs which have entered into any international transactions with associated enterprises or have undertaken specified Domestic Transactions, need to file Form 3CEB. This form should be certified by a practicing Chartered Accountant. Limited Liability Partnerships which are required to file this Form can do their tax filing by the 30th of November.

Documents Required for LLP Incorporation

Quick Checklist

Photograph of all the Partners,
PAN Card of all the Partners,
ID Proof of all the Partners (Driving License/Passport/Voter ID),
Electricity Bill or any other utility bill for the address proof of the Registered Office,

Specific Requirements

An Limited Liability Partnership must have a registered office in India. Documents like bank statement or electricity bill should not be older than 2 months. Along with that utility bill, rent agreement or sale deed and a No Objection Letter (NOC) from the landlord with his/her consent to use the office as a registered office of an LLP must be submitted.

Advantages of LLP

Points to make your decision easy

No Minimum Capital

No minimum capital is required for LLP Formation. No minimum capital contribution required from partners. A Limited Liability Partnership can be registered even with Rs. 1000 as total capital contribution.

LLP Audit

In the case of LLP, no mandatory Audit is required. The audit is required only when the turnover of the company exceeds Rs 40 lakhs and where the contribution exceeds Rs 25 lakhs.

Easy Transfer

Interest in Limited Liability Partnership can easily be transferred by introducing new Designated Partner in LLP and it will not affect its existence As it is a separate legal entity.

Separate Legal Entity

LLP enjoys the benefit of Separate Legal Identity in the eyes of law which clearly states that assets and liabilities of the business are not the assets and liabilities of the Partners.

LLP Tax Benefits

It is also exempted from various taxes such as dividend distribution tax and minimum alternative tax. The rate of tax on LLP is less than as compared to the company.

Multiple Relationship

A person can be a partner, employee or creditor of an Limited Liability Partnership. There may be different contracts with the same person in different capacity.

How to incorporate LLP Online?

5 Easy Steps

1

Obtain DSC

2

Reserve your LLP Name

3

Filing form FiLLiP

4

Filing of LLP Agreement

5

Incorporation Certificate

A Simple Checklist

Our Compliance Manager will get in touch with you to obtain your documents along with a simple checklist. You need to fill up the checklist and submit along with the documents for processing. Our expert team will verify documents and proceed with LLP Formation Procedure. All throughout the process, a dedicated Compliance Manager will keep you updated on the progress of LLP Registration.

Form FiLLiP

Once you submit your documents along with Checklist, we will proceed with the application for the Digital Signature. And simultaneously we will prepare the application for the LLP Name reservation through RUN. Once the name is approved, we will prepare the Form FiLLiP where in we will be applying for the DIN of the directors and Incorporation of an LLP. The MCA may take up to 6-7 days to approve the Application.

LLP Registration

Once the MCA approves the application for the Incorporation of Limited Liability Partnership, the next step would be to prepare an LLP Agreement. Once we file the LLP Agreement, the Registrar shall issue Incorporation Certificate along with the PAN and TAN. Once PAN and TAN is received, You may then proceed to open the Bank Account in the name of your Limited Liability Partnership, once PAN is allotted.

FAQs On Limited Liability Partnership

Get answers to all your queries

Yes, an existing partnership firm can be converted into LLP by complying with the Provisions of the LLP Act.

Pvt. Ltd. Co. and LLP have a lot of similarities yet they both are different in many of its characteristics and structures. When you wish to start your business, there are many factors that one needs to think upon before selecting any business structures. However, before selecting any business structure, you may refer LLP vs Pvt Ltd- A comparison between two important forms of organisation in India.

Yes, any existing private company or existing unlisted public company can be converted into LLP by complying with the Provisions of the LLP Act.

LLP shall have an option to declare one more address within the jurisdiction of same ROC (other than the registered office) for getting statutory notices/letters etc. from Registrar.

A Limited Liability Partnership is a legal entity separate from its partners and therefore, offers limited liability to its partners whereby any debts and obligations of the LLP will be borne by the assets of the LLP. In the case of a conventional partnership, the partners are jointly and severally liable for each debt and obligation of the partnership firm.

Reviews

Vijay Nayak

We contacted CA Agrawal Kanhere for company registration and trademark they had done the process well. We are much happy and satisfied with their services. Thank you CA Agrawal Kanhere for you services.

Limited Liability Partnership

Limited Liability Partnership

Also, there are a few more important changes have been made through LLP (Second Amendment) Rule, 2022, which are as follows:

Government Fees / Cost for LLP registration:

Compliance required for LLP

Documents Required for LLP Incorporation

Quick Checklist

Specific Requirements

Advantages of LLP

How to incorporate LLP Online?

1

2

3

4

5

A Simple Checklist

Form FiLLiP

LLP Registration

FAQs On Limited Liability Partnership

1. Can an existing partnership firm be converted to LLP?

2. I wish to start my business but I am confused between Private Limited Company and LLP, what should I select?

3. Can an existing company be converted to LLP?

4. Can LLP give any other address (besides its registered office) for the purpose of receiving communication from Registrar?

5. What is the basic difference between a Limited Liability Partnership and a General Partnership?

Reviews

Vijay Nayak