Feature of LLP Registration

There are many features of LLP. An LLP is a body corporate with separate legal entity from its partners which means it can sue or be sued in its own name. An LLP will be governed by LLP agreement so partner’s duties will be decided under Partnership Agreement and mutual rights also governed by the LLP. An LLP cannot be started with sole owner, every LLP should have at least two partners in it. It is also liable to the extent of its assets which means partner’s liability will be limited and a partner will liable extent of agreed contribution in the agreement and a partner is not liable for other partner’s negligence. As per the rules and regulation of MCA only designated partner are responsible for compliance. If you are running a company and want to convert into an LLP then you can do this. So as you can see that LLP has many features and you can finding up an LLP whenever you want or in its time.

Minimum Requirements for LLP registration

LLP requires minimum two partners for incorporation. However unlike companies LLP does not require a minimum capital under the LLP act. Further, you also require LLP agreement as the same has to be submitted with roc upon incorporation of the LLP. Further, your designated partners should obtain designated partners identification number just like director identification number is provided to the directors of the company. Further, they are also required to obtain digital signature certificate. So as you can see that these are minimum requirement for LLP registration so you have to fulfill these requirements if you want to start your own LLP firm.

Timeline for LLP Incorporation

Timeline of LLP registration is not lengthy as you can file your incorporation form online. Online procedure will save your lot of time and energy. So as you can see above that Procedure is very simple and easy. You have to reserve your LLP’s name first or you can skip this by filing FilliP form. After filing incorporation form authority will check your form. In few days you will get your incorporation number. After getting an Incorporation number you have to file LLP agreement within 30 days of its incorporation. So as you can see that timeline is very short you will get your incorporation certificate as soon as possible and after getting incorporation certificate you need to file LLP agreement to the Ministry of corporate affairs within 30 days.

How to Choose LLP name during registration

As you can see in above article that there are two ways for reserving your LLP name. First is through LLP-Run web services and second one is Fillip form. LLP-Run web service is older method and Fillip form is new method. Through LLP-Run web service you can reserve your LLP name and you can reserve maximum 2 names because in case if you don’t get first name then may be you can get the other one. If you want to reserve your LLP name through LLP-Run web service then you have to visit the official website of Ministry of corporate affairs and then you have to choose LLP registration where you can select the LLP-Run web service.

If you want to reserve your LLP name through Fillip form then you have to fill the form on the website of Ministry of corporate affairs. Fillip form is for incorporation of LLP firm, by filing this form you don’t have to file the other forms so it will be easy for you if you file this form. Because After filing of LLP-Run service you have to fill the other forms also but by filing Fillip form you are not required to filing the other forms.

How to Check LLP name availability

As you can see in above article that you can reserve your LLP name by filing the Fillip form or by LLP-Run services. You can also check personally on the internet that if you name is available or not. You can reserve 2 names for your LLP so you have choose the name accordingly to conditions of Ministry of Corporate affairs.

What are the Annual Compliance after LLP registration

After incorporation of LLP firm you have to comply with the rules and regulation of Ministry of Corporate affairs and all compliances should be done within time period because in case failure of compliances you may have to pay huge fine for this so be aware. After incorporation of your LLP you have to file your Annual statement to the MCA because it is compulsory and also you have to file your Profit and Loss statement to the MCA.After incorporation of LLP you need to comply with the rules and regulation of Income tax department also because it is compulsory. You have to file Income tax of your LLP and also you have to make a PAN card for your LLP because without PAN you cannot file your income tax return. for the more info visit here on LLP Annual Filing Details.

Advantages of LLP Registration

Easy to Form : It is very easy to form LLP, as the process is very simple as compared to Companies and does not involves much formalities. Moreover, in terms of cost the minimum fees of incorporation is as low as Rs 4000 and maximum is Rs 5000.

Liability: A LLP exists as a separate legal entity from its partners. Both LLP and its partners are separate entities and both functions separately. Liability for repayment of debts and lawsuits incurred by the LLP lies on it and not on the partner. Any business with potential for lawsuits should consider incorporation, it will offer an added layer of protection.

Perpetual Succession: An incorporated LLP has perpetual succession. Notwithstanding any changes in the partners of the LLP, the LLP will be a same entity with the same privileges, immunities, estates and possessions. The LLP shall continue to exist till its wound up in accordance with the provisions of the relevant law.

Flexible to Manage: LLP Act 2008 gives LLP the almost freedom to manage its own affairs. Partner can decide the way they want to run and manage and put the same in form of terms and conditions in the LLP Agreement . The LLP Act also in most cases provides that the said provision will applicable, only in case nothing is provided in the LLP Agreement.

Easy Transferable Ownership: It is easier to become or leave the partnership of the LLP or otherwise it is easier to transfer the ownership in accordance with the terms of the LLP Agreement. Ceasing of old partners and coming of new partners , will automatically leads to change in ownership of LLP.

Separate Property: A LLP as legal entity is capable of owning its funds and other properties. The LLP is the real person in which all the property is vested and by which it is controlled, managed and disposed off. The property of LLP is not the property of its partners.

Taxation: LLP is not required to pay surcharge on income tax. Moreover , it is also not required to pay tax on profits distributed to partners whereas Company is required to pay tax on dividend distributed to its shareholders.

Raising Money: Financing a small business like sole proprietorship or partnership can be difficult at times. A LLP being a regulated entity like company can attract finance from PE Investors, financial institutions etc.

Capacity to sue: As a juristic legal person, a LLP can sue in its name and be sued by others. The partners are not liable to be sued for dues against the LLP.

No Mandatory Audit Requirement: In LLP, only in case of business, where the annual turnover/contribution exceeds Rs 40 Lacs/Rs 25 Lacs are required to get their account audited annually by a chartered accountant. This provides great relief to small businessmen.

Partners are not agent of other Partners: In LLP, Partners unlike partnership are not agents of the partners and therefore they are not liable for the individual act of other partners.