Complete Guide on Limited Liability Partnership Registration in India for the Startups
a) Minimum Partners Requirements :-
Ans- Minimum â€“ 2 Partners
*FOR NRI- One of the them must be resident of India.
b) Minimum Capital Requirements-
Ans- Capital Requirements â€“ Any Amount, no requirements for the minimum capital amount.
c) need office required for registration purpose?
Ans- Yes, Just for Communication purpose .
*If you have office then give office address .
*if you work from Home then give residential address.
d) Process Involved in LLP ?
Step 1- Apply for your Partners DIN
e) Time take to incorporate a LLP ?
Ans- A Limited Liability Partnership Completed in 14-20 days. The time taken for incorporation will depend on submission of relevant documents by the client and speed of Government Approvals. To ensure speedy incorporation, please choose a unique name for your LLP and ensure you have all the required documents prior to starting the incorporation process.
f) Initial Documents Required ?
Ans- For all Partners required Documents
Â· ID Proof and Address Proof for all Partners.
Â· PAN Card Mandatory
Â· latest utility bill (electric bill/telephone bill) for the property to be used for registered office (not older than 2 months)
Â· latest tax receipt/ownership deep of the property (not older than 2 months
G) Government Charges and other legal expense for Incorporate LLP ?
Â· Director Partner Identification Number ( DPIN/DIN)- Costing for DIN 1000 Rupees on 2 Partners. its valid for Lifetime. Its just like UserId for the Partner.
Â· Digital Signature (DSC)â€“ Costing vary from 2000 Rupees on 2 Partners. Its made by Sify, Emudra and some other companies and used for signing and filing forms during registration
Â· Application for Name Reservation- Costing is 500 Rupees. Its filed for reserve your LLP Name.
Â· Government Charges including Stamp Duty Costing around 750 Rupees.
Â· Preparing LLP Agreement by professional costing around 250 Rupees.
Â· Preparing LLP Partner Consent by Professional costing around 250 Rupees.
Total Government Expenses around 4750 rupees to 5000 Rupees.
H) Professional Charges which take by Professionals(CA/CS/CWA) in Market ?
Ans- Professional Charges to Incorporate a LLP In India is from 4000 to 6000 Rupees & more.
I) Can you register it yourself without help of professional ?
Ans- No, because its needed a professional and during the filing of Documents and Forms its authorized by a Chartered Accountant/Company Secretary/Cost Accountant DSC so you can understand Signature value and Risk of CA/CS/CMA.
J) Annual Compliance for LLP after Incorporation ?
Ans- 2 Statements filed each year .
1) Statement of Account and Solvency
2) LLP Annual Return
k) Tax Rate on LLP Profits ?
LLP will be treated as Partnership firm for the purpose of tax and therefore will be taxed on the line of partnership firm. The effective tax rate is 30.90% on Profit. There will be no surcharge applicable on LL
L) Why LLP is adopted by Startups in India-
Advantages to Form LLP in India-
Easy to Form: It is very easy to form LLP, as the process is very simple as compared to Companies and does not involves much formalities. Moreover, in terms of cost the minimum fees of incorporation is as low as Rs 4000 and maximum is Rs 5000.
Liability: A LLP exists as a separate legal entity from its partners. Both LLP and its partners are separate entities and both functions separately. Liability for repayment of debts and lawsuits incurred by the LLP lies on it and not on the partner. Any business with potential for lawsuits should consider incorporation, it will offer an added layer of protection.
Perpetual Succession: An incorporated LLP has perpetual succession. Notwithstanding any changes in the partners of the LLP, the LLP will be a same entity with the same privileges, immunities, estates and possessions. The LLP shall continue to exist till its wound up in accordance with the provisions of the relevant law.
Flexible to Manage: LLP Act 2008 gives LLP the almost freedom to manage its own affairs. Partner can decide the way they want to run and manage and put the same in form of terms and conditions in the LLP Agreement . The LLP Act also in most cases provides that the said provision will applicable, only in case nothing is provided in the LLP Agreement.
Easy Transferable Ownership: It is easier to become or leave the partnership of the LLP or otherwise it is easier to transfer the ownership in accordance with the terms of the LLP Agreement. Ceasing of old partners and coming of new partners , will automatically leads to change in ownership of LLP.
Separate Property: A LLP as legal entity is capable of owning its funds and other properties. The LLP is the real person in which all the property is vested and by which it is controlled, managed and disposed off. The property of LLP is not the property of its partners.
Taxation: LLP is not required to pay surcharge on income tax. Moreover , it is also not required to pay tax on profits distributed to partners whereas Company is required to pay tax on dividend distributed to its shareholders.
Raising Money: Financing a small business like sole proprietorship or partnership can be difficult at times. A LLP being a regulated entity like company can attract finance from PE Investors, financial institutions etc.
Capacity to sue: As a juristic legal person, a LLP can sue in its name and be sued by others. The partners are not liable to be sued for dues against the LLP.
No Mandatory Audit Requirement: In LLP, only in case of business, where the annual turnover/contribution exceeds Rs 40 Lacs/Rs 25 Lacs are required to get their account audited annually by a chartered accountant. This provides great relief to small businessmen.
Partners are not agent of other Partners: In LLP, Partners unlike partnership are not agents of the partners and therefore they are not liable for the individual act of other partners.
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