LLP - Limited Liability Partnership was Introduced in 2008 in India. However, with increasing compliances in registration and regulations relating to Private Limited Companies, LLPs are gaining momentum in India.
These are economical while registering as well as while fulfilling ROC compliances. There are hefty fines to Private Limited companies on non-compliance compared to LLPs.
How is LLP different from a Partnership firm?
A partnership firm is not a separate legal entity while LLP is a separate legal entity meaning thereby that it can hold assets in its name and it is different from its partners, but the liability of a partner in an LLP is limited to the contribution made by him or her.
Registration of LLP is mandatory while it is optional in the case of a partnership firm. There is also perpetual succession ie.LLP will continue to act as a going concern even in the event of death, resignation, insolvency, or resignation of its partners, which is not there in the case of a Partnership firm.
How to register LLP?
Minimum two partners are required for registering LLP, while there is no cap on the maximum number of partners.
You first need to register the name of LLP on the MCA portal by clicking RUN LLP on the MCA services tab. The fee for registering a name is Rs.200/- and the registered name will be available for 3 months.
After registering the name, you need to fill the FiLLiP available on the LLP forms download section on MCA services. The various documents required for registering LLP are:
1. Place of business proof: This can be the electricity bill along with NOC from the owner.
2. KYC of designated partners: Which can be voter card/ driving license and bank statements.
3. Subscribers sheet along with form 9 and consent on a stamp paper.
You need to fill this form by applying DSC of one of the designated partners and DSC of CA/CS/Advocate. You have to upload it on the MCA portal after pre-scrutiny of the form. You will have to pay the fees after uploading the form.
Make sure that the size of your form doesn't exceed 6 MB.
After 5-7 days of uploading the form, you will get a registration certificate or you will get a query mail which you will have to resolve in the mentioned time.
After receiving the registration number you will have to fill and upload form 3 where you will upload the LLP agreement on a stamp paper cost of which will be different in every state (ranging from Rs.50 to Rs.2000 as per the rules of the state where LLP is being registered).
After that, you will get a mail about the confirmation of your LLP being registered.
What are the ROC forms that need to be filled in case of LLP?
You have to fill Form 8 which also contains details of financials of the LLP including Profit and Loss and Balance Sheet, and form 11 which is just a statement.
In the case of LLPs whose turnover exceeds Rs.40 Lakhs or Contributions exceed Rs. 25 lacs, they will be required to get their accounts audited.
LLP is easy to operate as compared to companies and partnerships. It's a kind of hybrid between companies and a partnership firm.
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