Before knowing the LLP registration process, we must know about LLP and what are its benefits and how it is a good option for start-ups.
LLP is an organization that is registered with the Government under the Registrar of Companies it is just like a partnership with the limited liabilities of its partners and its full name is Limited Liability Partnership. Like a partnership firm, it also consists of partners to operate its function and management. It has the features of both a partnership firm and companies that are registered under the companies act. It starts with a minimum of two persons who will act as a designated partner in the LLP and perform all the functions as a director performs in the company. The LLP is regulated by the provisions made under the Limited Liability Partnership Act, 2008 which was introduced in India in 2009. Anyone can start their LLP with no minimum capital obligation. The professionals in India also prefer LLP to start their business as it gives many benefits at less cost.
The LLP has many benefits and features which makes it a good option for small, medium enterprises as well as professionals. The advantages of LLP are:
1. Separate Legal Identity
The LLP has its own identity which is different from others like from its partners or creditors or debtors etc. Like a private limited company or other companies registered with MCA, the LLP can also purchase or sell properties in its name as any person can do.
2. Limited Liability
The partners of the LLP are not obliged to take any liability of the LLP, which means a partner will never be liable personally for any debt or liability of the LLP.
3. ROC compliance burden
In a comparison of the companies LLP has a lesser compliance burden as well as the cost is also less. Certain exceptions are granted by the ROC like:
- The LLP doesn't need to appoint an auditor
- There is no requirement for the appointment of the independent director or women director
- There is no need to file commencement of business intimation to the ROC
- There is also no need to do a tax audit until the LLP exceeds the turnover of 40 lakhs or capital contribution which is 25 lakhs
- There is no extra tax of 15% as DDT on the distribution of the profit of the LLP
- There is no limit in the partners of LLP.
Many other benefits are available in LLP, the registration cost of LLP is quite low as well as the maintenance charges are also low.
The process of LLP registration online in India is very easy. The applicant only needs to submit the documents online to the Register Experts and they will provide you with the certificate of incorporation with 10-15 days.
The process is as follows:
1. Name approval letter
The first step is to get the name approval from the govt by filing the RUN application in this form 2 names can be applied at a time and whichever name is available and the officer thinks fit will grant such name and that name will be valid for 3 months.
2. Preparation of DSC
The digital signature certificate is a very important part of registration without this the application cannot be filed. The DSC will be issued to the designated partner of the LLP
3. Preparation and Signing of Documents
After the name approval few documents shall be drafted and the same shall be signed by the partners and designated partners of the LLP.
4. Submission of Final form
Once all above process is completed the final form shall be submitted to the ROC along with all relevant documents and fees within the prescribed 3 months' time limit
5. Certificate of Incorporation
If all the documents are accepted by the ROC, they will issue a certificate of incorporation
6. PAN
After receiving COI a PAN application shall be filed to the NSDL for PAN allotment
7. Submission of LLP agreement
An LLP agreement shall be drafted, signed, notarized and submitted to the ROC within 30 days of incorporation. The agreement shall be notarized on stamp paper and the value of the Stamp Paper of LLP agreement shall be determined by the capital and state of the registered office of the LLP.
If an agreement is submitted after 30 days then there will be a penalty of Rs. 100/- per day.
CAclubindia
