What is LLP?
An LLP or a Limited Liability Partnership is a term that many of us are aware of but do not wholly understand it. LLP represents a partnership of elements or some corporations which as per the laws amended have some amount of liability. If an individual is a part of the LLP then one partner would not be responsible for another’s professional delinquency. The self-same partner would be wholeheartedly responsible for his / her own actions. In contrast to the corporation companies, the partners would be the ones that drive the business. The concept was therefore introduced as a means to create a novel form of business which is simple to sustain and it helps the owners in every way possible.
What is the need of LLP Registration?
If you are a business owner then you would have your own business model in place for carrying out the activities. The post you choose it; the next thing would be to decide whether you want an LLP Registration or Private Limited Company Registration. Based on the options you have, and after you have weighed down the highs and lows would you be going for your selection.
But the obvious choice would be to go for LLP Registration and there are a number of points that support this fact,
- Separate Legal Entity – It works as a separate legal entity from the partners which means that you can sue your partner if the need arises. The partners can change but the business would still be intact.
- Versatile Agreement – You can transfer the ownership of LLP quickly with a lot fewer hassles. Even the partner changes can be done without much of a problem.
- Perfect for Small Businesses – LLPs that have the minimum capital amount of 25 lakhs or a turnover of over 40 lakhs would seldom need to worry about audits. This is the reason that LLP is a perfect choice for small businesses.
- Devoid of Fancy Designations – An LLP consists of partners with no managerial level distinctions. This is because an LLP has partners that own and manage the business albeit the private limited companies which do not function like that.
How to Register an LLP in India?
There are a number of steps that are involved inthe LLP Registration in our country. Some of them are listed out with the appropriate explanations.
- Getting the DSC and DIN
The first thing that needs to be done is to get the Digital Signature Certification (DSC) and the Director Identification Number (DIN) from the partners. The reason that both of these documents should be submitted online as per the laws passed on by the Government of India.
- Approving the Name of the LLP
Next up would be deciding on the name of the LLP for official registration. The partners need to check and verify whether the names are already taken up or not. You can login into the MCA portal and look for it as well. The appointed registrar over there would only be taking the name that has not been approved before.
- LLP Agreement
The agreement is a very important aspect of the Limited Liability Partnership. It confirms the facts, figures, mutual rights and the responsibilities in between the partners, and in between the LLP as well. All of the designated partners would then be entering into the agreement by filing Form 3 from the MCA portal. This needs to be done in 30 days within the date of incorporation.
- LLP Incorporation Certificate
Once the registrar completed the Memorandum of Association (MOA) and the Articles of Association (AOA), you would be a step closer to registering your LLP. The partners should now set their sights on LLP Incorporation Certificate by submitting all the documents to the registrar. Once that is done, you would be ready to take your first steps. The total time frame required for the same would be upto 2-12 days or so.
- Application for PAN, TAN and Bank Accounts
Once the LLP incorporation certificate is received, you would now need to go to the National Securities Depository Limited (NSDL) for the application of PAN and TAN. The total time taken would be approximately three weeks.