Benefits of LLP Registration:
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Separate Legal Entity:
An LLP has a separate legal entity, just like a company. The LLP is distinct from its partners. An LLP can sue and be sued in its own name. The contracts are signed in the name of the LLP, which helps to gain the trust of various stakeholders and gives the customers and suppliers a sense of confidence in the business'..
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Limited liability of the partners:
The partners of the LLP have limited liability. The liability of the partners is limited to the contributions made by them. This means that they are liable to pay only the amount of contributions made by them and are not personally liable for any loss in the business. If an LLP becomes insolvent at the time of winding up, only the LLP assets are liable for clearing its debts. The partners have no personal liabilities, and thus they are free to operate as credible businessmen.
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Low cost and less compliance:
The cost of forming an LLP is low compared to the cost of incorporating a public or private limited company. The compliances to be followed by the LLP is also low. The LLP needs to file only two statements annually, i.e. Annual Return and a Statement of Accounts and Solvency.
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No requirement of minimum capital contribution:
The LLP can be formed without any minimum capital. There is no requirement of having a minimum paid-up capital before going for incorporation. It can be formed with any amount of capital contributed by the partners.
Checklist for LLP Registration:
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Minimum of two partners.
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DSC for all designated partners.
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DPIN for all designated partners.
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Name of the LLP, which is not similar to any existing LLP or trademark.
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Capital contribution by the partners of the LLP.
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LLP Agreement between the partners.
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Proof of registered office of the LLP.
LLP Registration Process:
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Obtain Digital Signatures
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Obtain Director Identification Number (DIN)
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Choose a Name for the LLP
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Form for LLP Incorporation (FiLLiP)
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Draft LLP Agreement
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Obtain a Certificate of Incorporation
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Apply for PAN and TAN
Documents Required for LLP Registration:
For Designated Partners and Partners:
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Identification Proof:
PAN Card (mandatory for Indian nationals); Passport (for foreign nationals).
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Address Proof:
Aadhar Card, Voter ID, or Passport.
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Residence Proof:
Recent utility bill or bank statement (not older than two months).
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Photograph:
Passport-sized photograph.
For Registered Office:
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Proof of Address:
Recent utility bill (electricity, water, or property tax receipt).
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NOC from Owner:
No Objection Certificate from the property owner, if the premises are rented.
Timeframe for LLP Registration:
The entire process typically takes 7-10 working days, subject to document verification and approval by the Ministry of Corporate Affairs.
Post-Incorporation Compliance:
After incorporation, an LLP must:
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PAN and TAN Application:
Obtain a Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) for the LLP.
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Bank Account:
Open a current bank account in the name of the LLP.
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GST Registration:
Register for Goods and Services Tax (GST) if the LLP's turnover exceeds the threshold limit or if it is engaged in inter-state supply.
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Annual Filings:
File annual returns (Form 11) and statements of accounts and solvency (Form 8) with the RoC.
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Income Tax Returns:
File annual income tax returns with the Income Tax Department.
Registering an LLP provides a flexible and advantageous business structure, combining the benefits of limited liability with the operational ease of a partnership, making it a popular choice among entrepreneurs in India.
