register a limited company

 (LLP) has emerged as an extremely popular type of business by entrepreneurs because it blends the advantages of both the partnership firm and company in one form of organization.

It is a concept that was introduced in 2008. Limited Liability Partnership (LLP) was first introduced by India during 2008. The concept of an LLP is a type of partnership that combines the features of the partnership firm as well as a company. It is governed by the Limited liability Partnership Act, 2008 governs this type of LLP within India. A minimum of two partners is required to form an LLP. There is however no upper limit for the maximum number of shareholders within an LLP.

Within the partnership that are part of the llp registration, there must be at least two designated partners, who must be individuals as well as at least one must reside in India. The rights and obligations for designated partner are defined in the LLP agreement. They are accountable to ensure compliance with the rules and regulations that are contained in the LLP Act in 2008 as well as other provisions contained within the LLP agreement.

The features of LLP

• It is a legal entity, just like companies.
• The responsibility on the part of every partner is only limited to the amount of contribution to the partner.
• The cost for the formation of an LLP is minimal.
• There is less compliance and regulations.
• There is no minimal capital contributions.

Minimum number of partner needed to form an LLP is two. It is not possible to set a limit to the number of partners that can be incorporated into an LLP. Within the group of partners, there must be at least two designated partners , who must be individuals with at minimum one must be a resident of India.

The rights and obligations for designated partner are covered in the LLP agreement. They are the sole responsible party to ensure compliance with the rules and regulations in the LLP Act 2008 and provisions stipulated by the LLP agreement.

If you are planning to begin your company with an llp company registration, then you have to get it registered as a Limited liability Partnership Act, 2008.

Benefits Of LLP

Separate legal entity

An LLP has its own legal entity, similar to companies. It is a separate legal entity. LLP has a distinct legal entity from partners. The LLP is able to sue and be sued under it's own name. The contracts are executed by the LLP and help build trust among various stakeholders and provides customers and suppliers with a sense of trust in the company.

The partners are not liable for the liability of their partners.

The members of the LLP are not liable for any loss. The responsibility to the partners are restricted to the amount of contribution made by them. That means they are only liable for what they contributed received by them. They are not personally accountable for any losses incurred in the business. If an LLP goes into insolvency when it is winding up, only LLP assets are accountable to pay its debts. Partners have no personal liability, which means they are free to function as business professionals who are trustworthy.

Costs are low and compliance is less

The cost of creating an LLP is less than the expense of incorporating a private or public limited company. The requirements to follow by the LLP is also very low. The LLP is required to file only two reports annually, i.e. Annual Return and Statement of Solvency and Accounts.

There is no minimum capital investment

The LLP can be established with no minimum capital requirement. The LLP isn't required for having a minimum amount of capital before incorporating. It is possible to form the company using the amount donated by the investors.

The disadvantages of LLP

Penalties for non-compliance

The amount of compliance that must be adhered to by LLP is very minimal. However, if the requirements are not fulfilled within the stipulated timeframe, then the LLP must pay a significant penalty. Even in the event that the LLP has no business during the year it must make returns with the Ministry of Corporate Affairs (MCA) every year. If it is not able to complete the return, the LLP will face a severe penalty assessed to the LLP.

Dissolution and winding up of LLP

Two partners at a minimum are required to create an LLP. If the minimum number of partners falls less than two for a period of six months and the LLP will be dissolution. The LLP could be shut down in the event that the LLP cannot meet its dues.

The difficulty of raising capital

The LLP doesn't have the idea of equity or shareholders as an company. The LLP is not a place for angel investors or venture capitalists are not able to be shareholders in an LLP in the form of shareholders. The reason for this is that the shareholders are members of the LLP and must assume all the duties as the partner. This is why the angel investors as well as venture capitalists tend to invest in the company of their choice company instead of an LLP which makes it more difficult for LLPs to raise capital.

Step 1: Find a Digital Signature Certificate (DSC)

Before beginning the registration process it is necessary to obtain an application for the digital Signature of participants of the LLP. This is due to the fact that all documents of the LLP are created online and have to be signed digitally. Therefore the designated partner must get their digital Signature certificates through the government acknowledged certification agencies.

The following is an inventory of these accredited agencies. The cost for obtaining DSC differs based on the agency that certifies. Additionally, you must obtain the class 3 category DSC or go hereto ask the ClearTax specialist procure DIN for you. If you opt for a Limited Liability Partnership company registration with ClearTax 2 DINs can be covered under the plan, and there's no requirement to apply separately for DIN.

Step 2 Step 2: Application for Director Identification Number (DIN)

It is necessary to request the DIN for all designated partners or the ones who intend to become the designated partner for the planned LLP. The application to allot DIN must be submitted on Form DIR-3.

You must attach the scans of the documents (usually Aadhaar and PAN) to the form. The form shall be signed by a Company Secretary in full- time employment of the company or by the Managing Director/Director/CEO/CFO of the existing company in which the applicant shall be appointed as a director.

Step 3. Name Approval

The LLP-RUN (Limited License Partnership-Reserve Unique Name) is filed to secure reservations of name for the new LLP that will be processed in the Central Registration Centre under Non-STP. However, before you quote the name on the application, it's suggested to make use of the free name search feature on the MCA website.

The system will show you the names that closely resemble those of existing companies/LLPs that are based on the criteria you have filled up. This will assist to select names that aren't identical to names that are already in use. The registrar will accept names only when it is not in conflict with the eyes by The Central Government and does not be a copy of any existing partnership company or LLP or trademark or body corporate.

The RUN-LLP form must be accompanied by the fees in accordance with Annexure 'A' that may be deemed to be approved or rejected by the registry. The form's resubmission can be submitted within 15 days to correct the errors. The form is designed to allow for two proposed names for the LLP.

Step 4 4. Incorporation LLP

• The form that is used to incorporate is FiLLiP(Form for the incorporation of a Limited Liability Partnership) which must be submitted to the Registrar, who has authority over the state the headquarters of the LLP is located. The form is an integrated form.
• Fees as per Annexure "A A.' must be paid.
• This form also outlines the procedure the possibility of applying for allotment of DPIN for individuals who will be designated as an authorized partner has neither an DPIN or DIN.
• An application to allot will be submitted by two persons only.
• Reservations can be done via FiLLiP as well.
• If the name sought is approved, the name that has been approved and reserved will be used to fill the name that is proposed for the LLP

The 5th step: File Limited Liability Partnership (LLP) Agreement

LLP agreement regulates the mutual rights and obligations of the partners, as well as in relation to and the LLP as well as its partner.

• LLP agreement must be filed on the form 3 online on the MCA Portal.
• Formula 3 to file the LLP agreement must file within the 30 day of the day of incorporation.
• It is important to note that the LLP Agreement has to be printed on Stamp Paper. The significance for Stamp Paper is different for each state.

Documents required to be submitted for LLP Registration

A. Documents of Partners

• PAN Cardor ID Documentation of Partners All partners must provide their PAN number at the time of registration with LLP. PAN card is used as a primary proof of ID.
• Address Documentation of PartnersPartner's Address Proof Partner may submit any document taken from Voter's ID Passport, Driver's License, Passport as well as Aadhar Card. Name and other information in accordance with the address proof and PAN card must be identical. When the spelling for one's name, father's name or date of birth are different on the address proof and PAN card, it must be changed prior to submission to RoC.
• residence proof of PartnersRecent bank statement, phone bill, mobile bill gas bill, or electricity bill is required as a residence evidence. These statements or bills shouldn't be more than a couple of months old. It should also contain the name of the partner as stated on the PAN card.
• Photograph Photograph Partners must also supply their passport-sized photograph, with a white background.
• Passport (in the case of Foreign Nationalsand NRIs)- For becoming an partner in an Indian LLP foreign citizens and NRIs must provide their passports in a mandatory manner. Passports must be signed by notarization or apostiling by the authorities responsible for the respective country that houses the foreign nationals as well as NRI or else the Indian Embassy in the country is also able to sign the documents.

Foreign nationals and NRIs must provide evidence of address, which is a driving licence or bank statement, residence card, or any other government-issued identity document that has the address.

If the documents are not in another language languages other than English language A notarized or apostilled translation copy should to be included.

B. Documents of the LLP

• Evidence of Registered Office Address: The proof of registered office needs to be presented at the time of application or before 30 days from the date of incorporation.
  • When the place of business is leased by lease, a rent agreement and a non-objection certificate from the landlord must be provided. A no-objection certificate is the agreement from the landlord to allow the LLP to use the office as a registered office.
  • Additionally, any single document from utility bills such as electricity, gas or telephone bills must be provided. The bill must contain the full address of the premises and the name of the owner. Additionally, the document shouldn't be more than two months.
• Digital Signature CertificateOne one of these partners has to choose the digital Signature Certificate as well, since all applications and documents are digitally signed by the signatory authorized to sign it.

Checklist to LLP Registration

• Two partners are required.
• DSC for all partners who have been designated.
• DPIN for all partners who have been designated.
• Its name is the LLP It isn't similar to any other LLP or trade mark.
• Capital contribution made by the shareholders of LLP.
• LLP agreement between the partners.
• Evidence of the registered office of the LLP.