Limited Liability Partnership (LLP)
Under a Limited Liability Partnership (LLP), two or more partners form a special partnership and have limited liabilities. It is registered as per the compliance and regulatory guidelines of the Ministry of Corporate Affairs (MCA).
Limited Liability Partnership (LLP) in India took shape after January 2009, making it an instant success with startups and professional services. Limited Liability Partnership Registration, governed by the Limited Liability Partnership Act, 2008, combines the benefits of a partnership with that of a limited liability company. LLP was introduced to provide a form of business that is easy to maintain and to help owners by providing them with limited liability.
Benefits of a LLP:
Seperate Legal Entity:
► LLP is a separate legal entity from the partners. Each partner can sue the other in case a situation arises.
► It has an uninterrupted existence that follows perpetual succession, i.e., the partners might leave, but the business remains. A term of dissolution has to be mutually agreed on for the firm to dissolve.
Flexible Agreement:
Transferring the ownership of LLP is also simple. A person can quickly be inducted in as a designated partner and the ownership switches to them.
Suitable For Small Business:
► LLPs having a capital amount less than 25 lakhs and turnover below 40 lakhs per year do not require any formal audits. It makes registering as LLP beneficial for small businesses and startups.
► An LLP can own or acquire property because it is recognized as a juristic person. Partners of LLP cannot claim the property as theirs.
No Owner /Manager Distinction:
An LLP has partners, who own and manage the business. This is different from a private limited company, whose directors may be different from shareholders. For this reason, VCs do not invest in the LLP structure.
Documents Required for LLP Registration:
► Scanned copy of PAN Card or passport (Foreign Nationals & NRIs)
► Scanned copy of Aadhar Card/ Voter’s ID/Passport/Driver’s License
► Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
► Scanned passport-sized photograph Specimen signature (blank document with signature [partners only])
Note: Any one of the partners must self-attest the first three documents. In the case of foreign nationals and NRIs, all the documents must be notarized (if currently in India or a non-Commonwealth country) or apostilled (if in a Commonwealth country).
Registered Office Address proofs:
► Scanned copy of latest bank statement/telephone or mobile bill/electricity or gas Bill
► Scanned copy of Notarized Rental Agreement in English
► Scanned copy of No-objection Certificate from the property owner
► Scanned copy of Sale Deed/Property Deed in English (in case of owned property)
Note: Your registered office need not be a commercial space; it can be your residence, too.