A Limited Liability Partnership (LLP) is a unique business structure where partners benefit from limited liability, combining features of partnerships and corporations. Unlike traditional partnerships, each partner in an LLP is not held accountable for the misconduct or negligence of other partners.

An LLP is recognized as a distinct legal entity separate from its members, resulting in limited liability for members, restricted to their agreed-upon contributions.

As per the “LLP Act, 2008,” an LLP is a partnership created and registered under this legislation. The LLP agreement refers to any written contract between LLP partners or between the LLP and its partners, outlining their mutual rights, duties, and obligations within the LLP.

Features

An LLP, as per Section 3 of the Limited Liability Partnership Act (LLP Act), 2008, is established as a body corporate, formed and incorporated under the Act, serving as a distinct legal entity separate from its partners.

Perpetual Succession is a notable feature where an LLP can sustain its existence beyond the retirement, insanity, insolvency, or death of one or more partners. It possesses the ability to enter into contracts and hold property in its name.

In terms of Mutual Agency, unlike a partnership firm, the independent or unauthorized actions of one partner do not impose liability on others. All partners act as agents of the LLP, and the actions of one partner do not bind the others.

The governance of partner rights and duties is determined by an LLP Agreement, offering flexibility for partners to structure it according to their preferences. In the absence of such an agreement, the Act governs the mutual rights and duties of all partners.

Limited Liability is a crucial protection, as outlined in Section 26 of the Act. While every partner is an agent of the LLP for the purpose of the business, they are not agents of each other. The liability of each partner is limited to their agreed contribution in the Limited Liability Partnership.

Regarding the Minimum and Maximum Number of Partners in an LLP, it must have at least two partners, including at least two individuals as designated partners. At any given time, at least one designated partner should be a resident in India. There is no maximum limit on the number of partners in the entity.

Benefits

Less Compliance Burden:
Compared to a company, LLPs experience lower compliance requirements and costs. LLPs only need to submit two statements annually – the Annual Return and the Statement of Accounts and Solvency, simplifying the compliance process.

No Specified Limit on Maximum Partners:
LLPs have the flexibility of partner numbers. While a minimum of two partners is required for formation, there is no set maximum limit. The number of partners can be adjusted according to the specific needs of the business.

No Minimum Capital Contribution Requirement:
Unlike some business structures, LLPs do not have a minimum capital contribution requirement. Partners can contribute any amount they deem suitable for the formation of the LLP, providing greater financial flexibility.

Enjoy Separate Legal Entity and Limited Liability:
Similar to a company, an LLP benefits from being a separate legal entity. It can enter into contracts, sue or be sued in its name. This distinct legal identity provides credibility to the LLP and fosters trust among stakeholders, suppliers, and customers in the market.

Checklist Of Documents

  • Copy of PAN card, Passport/ Voter-ID/Driving license of Partner(s).
  • Bank Statement of partner(s)/ Electricity bill.
  • Passport size photo of Partner(s).
  • NOC from owner of registered office and rent agreement or sale deed (if any).
  • Signature specimen of Partner(s).

Steps Involved in LLP Company Registration Process

The overall process involves five steps stated below:

Step 1

To commence the LLP registration procedure for K K Baranwal & Associates, it is necessary to acquire Digital Signature Certificates (DSC) for all designated partners participating in the LLP. These documents play a crucial role as all LLP registration documents are submitted online, and DSC is required for document verification. All designated partners are required to obtain these certificates from government-recognized agencies. The cost of applying for DSC may vary based on the certifying agency.

Step 2

All designated partners or prospective partners associated with K K Baranwal & Associates are required to obtain their Director Identification Number (DIN). To acquire this number, individuals must apply using Form DIR-3, attaching scanned copies of documents such as Aadhar card and PAN card. The form should be completed with all the necessary details and duly signed by the Company Secretary in full-time employment of K K Baranwal & Associates or any of the existing company’s Managing Director, CEO, CFO, or directors in which the applicant is set to be appointed as a director.

Step 3

the subsequent step involves obtaining approval for the firm’s name. K K Baranwal & Associates is required to utilize LLP-RUN (Limited Liability Partnership- Reserve Unique Name) to apply for the reservation of the proposed LLP’s name. It is essential to select a name distinct from any existing names of LLPs. The company must seek approval from the registrar for the chosen name. If the registrar rejects the initially proposed names, K K Baranwal & Associates must provide two alternative names within 15 days of the rejection.

Step 4

Following the approval of the name, K K Baranwal & Associates is required to proceed with the FiLLiP (Form for Incorporation of Limited Liability Partnership). This form must be submitted to the registrar overseeing the jurisdiction of the state. K K Baranwal & Associates should remit the applicable fees as per Annexure “A.” The allotment application must be submitted by two individuals, and reservation through FiLLiP is also a requisite.

Step 5

The final step in the incorporation of LLP is the LLP agreement that will govern the mutual rights and duties of all the partners. The agreement for LLP needs to be filled within 30 days of the date of incorporation. The LLP agreement has to be printed on the stamp paper, and the value of the stamp paper might vary from state to state.

The time involved in Online LLP Registration India

Typically, it takes approximately ten days to obtain the Digital Signature Certificate (DSC) up to Form 3. The remaining duration depends on the department’s processing time.

For further information on Limited Liability Partnership registration or the formation of a Public Limited company in India, feel free to reach out to the K K Baranwal & Associates team. K K Baranwal & Associates boasts a proficient team comprising Chartered Accountants, Company Secretaries, Advocates, Managers, etc., who offer their expertise in their respective fields. Schedule an appointment with K K Baranwal & Associates now to gain more insights into Public Limited Formation.