limited-liablity

Limited Liability Partnership (LLP) offer limited liability protection for an association of persons doing business. LLP refers to Limited liability partnership and is governed by Limited Liability Partnership Act 2008. Limited Liability partnership provides advantage of limited liability to its owners and at the same time requires minimal maintenance. The directors of a private limited company have limited liability to creditors. In case of default, banks / creditors can only sell company’s assets and not personal assets of directors.

LIMITED LIABILITY PARTNERSHIP (LLP)

Limited Liability Partnership is a new corporate structure that combines the flexibility of a partnership and the advantages of limited liability of a company at a low compliance cost. In other words, it is an alternative corporate business vehicle that provides the benefits of limited liability of a company, but allows its members the flexibility of organizing their internal management on the basis of a mutually arrived agreement, as is the case in a partnership firm.
Owing to flexibility in its structure and operation, it would be useful for small and medium enterprises, in general, and for the enterprises in services sector, in particular.

LLP is governed by the provisions of the Limited Liability Partnership Act 2008,
the salient features of which are as follows: –

" The LLP shall be a body corporate and a legal entity separate from its partners. Any two or more persons, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filing the same with the Registrar, form a Limited Liability Partnership. The LLP will have perpetual succession."
" The mutual rights and duties of partners of an LLP inter se and those of the LLP and its partners shall be governed by an agreement between partners or between the LLP and the partners subject to the provisions of the LLP Act 2008 .The act provides flexibility to devise the agreement as per their choice. "
"Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India. The duties and obligations of Designated Partners shall be as provided in the law."
"The LLP shall be under an obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A statement of accounts and solvency shall be filed by every LLP with the Registrar every year. The accounts of LLPs shall also be audited, subject to any class of LLPs being exempted from this requirement by the Central Government."
"The Central Government has powers to investigate the affairs of an LLP, if required, by appointment of competent Inspector for the purpose."
"The compromise or arrangement including merger and amalgamation of LLPs shall be in accordance with the provisions of the LLP Act 2008."
"The winding up of the LLP may be either voluntary or by the Tribunal to be established under the Companies Act, 1956. Till the Tribunal is established, the power in this regard has been given to the High Court."
"The Indian Partnership Act, 1932 shall not be applicable to Limited Liability Partnerships."

A firm, private company or an unlisted public company is allowed to be converted into LLP in accordance with the provisions of the Act. Upon such conversion, on and from the date of certificate of registration issued by the Registrar in this regard, the effects of the conversion shall be such as are specified in the LLP Act. On and from the date of registration specified in the certificate of registration, all tangible (moveable or immoveable) and intangible property vested in the firm or the company, all assets, interests, rights, privileges, liabilities, obligations relating to the firm or the company, and the whole of the undertaking of the firm or the company, shall be transferred to and shall vest in the LLP without further assurance, act or deed and the firm or the company, shall be deemed to be dissolved and removed from the records of the Registrar of Firms or Registrar of Companies, as the case may be.

The LLP will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature. No partner would be liable on account of the independent or unauthorized actions of other partners or their misconduct. The liabilities of the LLP and partners who are found to have acted with intent to defraud creditors or for any fraudulent purpose shall be unlimited for all or any of the debts or other liabilities of the LLP.

REGISTRATION

The time required to incorporate a LLP is minimum 15 working days can maximum it can be 25 or depends on documentation, availability of digital signature and name approval of the company. Attention of the applicant is invited towards Name availability Guideline so that while deciding the Name of company applicant is well aware of the provisions.

MINIMUN REQUIREMENTS:

2 designated partners
Capital Rs. 10,000
Colour Photographs (Two)
Pan Card of all the Partners
Address Proof of All Partners
Proof of Registered Address
NOC of registered address
Consent of designated partners

WHAT YOU WILL GET ?

Director identification number of both designated partners
Digital signature of any one
Name approval letter
Certificate of incorporation
LLP agreement
Pan card
Tan card
Rubber stamp

PROCESS

Acqire Din Number

It stands for director identification number (DIN). It is a unique identification number issued by the ministry of corporate affairs(MCA), for an existing director or a person intending to be director of a company.

Digital Signature

Digital signature certificate (DSC) is the digital equivalent (i.e electronic format) of physical or paper certificate. It can be preserved electronically to prove identity of an individual, to access information or services on the internet or to sign documents digitally it is used. It provides authentication of individual over e-forms which are required to file with MCA. To obtain DIN we require pan card, address proof and colour photograph of all the directors and an affidavt duly notarised as per the annexure-1 on stamp duty of Rs. 10/

Search For The Company Name

The promoters are required to provide maximum 6 names in order to their preference or choice, with the object reflecting in the give names, on which expertise knowledge will be given whether the name is available or not.

Application For Name Approval

Once the name is finalized by promoters and it is available too, the application of the same will be filed within same day. The name get approved by registrar of companies within a maximum period of 7 days , but in some cases depend on the availability.

Issue Of Certificate Of Incorporation

once all the compliances are duly completed, the digitally signed “Certificate of Incorporation” will be issued by registrar of companies.

Drafting Of LLP Agreement

after certificate of incorporation, LLP agreement is to be made between designated partners, and is to be submitted before registrar of companies within 30 days to avoid further penalities.

Benefits

Separate Legal Entity
Perpetual Succession
Dual advantages - Company and A Partnership
No partner will be responsible for other partner's misconduct
Cheaper to incorporate than a private limited company
Limits the liabilities of its partners

Documents Required For LLP Registration

Copy of PAN Card of designated partners
Passport sixw photograph of partners
Copy of Aadhar Card/Voter identity card
Copy of Rent agrement (If rented property)
Electricity/Water bill (Business Place)
Copy of Property Papers (If owned property )
Landlord NOC (Format will be provided)

Procedure for Incorporation of Private Limited

Application of DSC & DIN

i) First of all, the designated partners have to apply for Digital signature and DIN. Digital signature is an online signature used for filing and DIN refer to Directors Identification Number issued by MCA. If the designated partners already have DSC and DIN, then this step can be skipped.

Name Approval

You need to provide your company name to MCA in Form RUN. Names provided should ideally be unique and suggestive of company business. Name is available for 20 days.

LLP Agreement

Once name is approved, one needs to draft LLP AGREEMENT. LLP Agreement is filed in Form -1 with the MCA with the subscription statement within 20 days from the date of reciving of approval letter from MCA.

Get incorporation certificate

It typically takes 15- 25 days to form a Limited limited Partnership and get the incorporation certificate. Incorporation certification is a proof that company has been created. It also includes your CIN number.

Apply for PAN, TAN and Bank account

Then you need to apply for PAN and TAN. PAN and TAN are received in 7 working days.

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LIMITED LIABILITY