Limited Liability Partnership is defined in Limited Liability Partnership Act 2008 as “a partnership formed and registered under this act. It means a partnership will be called as Limited Liability Partnership (LLP) if such partnership is registered under Limited Liability Partnership Act 2008.
Limited Liability Partnership (LLP) is an alternative corporate business form that gives the benefits of “limited liability of a company” and “flexibility of a partnership” it means it is a combination of Partnership and Company and provides combined benefits of both form of business.
Limited Liability Partnership (LLP) is a separate legal entity and is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP whereas under normal partnership, liability of partners is un-limited.
Key Characteristics of Limited Liability Partnership (LLP):
- Limited Liability Partnership (LLP) is a separate legal entity from their Members
- Liability of LLP cannot be paid by Partners of LLP.
- Partners of Limited Liability Partnership (LLP) are bind by LLP agreement
- Control of Limited Liability Partnership (LLP) is in the hands of Designated Partners
- Limited Liability Partnership (LLP) is liable to pay income tax at rate which is applicable for partnership firm
Key benefits of Limited Liability Partnership (LLP):
- Limited Liability Partnership (LLP) have to comply with lesser ROC compliances as compare to a Company
- Limited Liability Partnership (LLP) is not required to get their accounts audited if turnover is exceeds 40 Lakh and Capital contribution is exceeds 25 Lakh
- There is no limit on maximum number of partners
- Company Incorporated in India or out Side India can become partner of Limited Liability Partnership (LLP). Further two LLP can also create LLP.
- There is no minimum capital requirement for Limited Liability Partnership (LLP)
Process for Registration of Limited Liability Partnership:
Registration of LLP is almost similar to registration of company, incorporation formalities of LLP is be complete with ministry of Corporate affairs (MCA). Following process to be followed for incorporation/registration of LLP:
- Name approval of LLP
- Preparation of Limited Liability Partnership Agreement on appropriate Stamp paper of relevant State
- Filing of forms (Form 2 and Form 11) and submission of Limited Liability Partnership Agreement
- Obtaining of LLP Incorporation Certificate
Documents required for Limited Liability Partnership:
Following documents would be required for every Designated Director of LLP:
- Photo
- PAN Card
- Any Address Proof (Aadhaar/DL/Passport/Voter ID)
- Bank Statement note more than 2 month old
Following details will also be required for every Designated Director of LLP (Documents will not be required)
- Email ID and Mob no.
- Educational Qualification details
- Occupation type- Professional/businessmen
- No. of years of living at a place for which address proof submitted
Following documents would be required of Proposed LLP:
- Rent Agreement for address proof (it can be in favour of proposed company) or NOC from Landlord for doing business in such place or Ownership Proof
- Electricity bill/Water bill/Fixed Landline Bill should not more than two month old