Limited Liability Partnership
LLP Registration in India
It is very easy to manage and consolidate the Limited Liability Partnership in India. To register an LLP a minimum of two partners is required, there is no such limit. An LLP agreement defines the rights and duties of partners. In LLP one partner is not responsible for the misconduct and negligence of another partner. Partners are responsible for compliance with all the provisions specified in the LLP agreement.
LLP Registration Checklist in India
1. At least two partners are required.
2. A Digital Signature Certificate is required for all selected partners.
3. DPIN for all nominated partners.
4. The LLP name must be such that it does not match the name of any existing LLP or trademark registration.
5. Money donated by LLP partners.
6. LLP agreement between partners.
7. Proof of registered LLP office.
How do you register your LLP with AK taxes?
1. Once we have received your request the transaction comes to you, explains the whole process, and collects the required documents.
2. Documents can be sent online through our AK tax website or mobile application.
3. The information obtained is verified and the application process for obtaining a digital Digital Signature Certificate by the applicant begins.
4. Once DSC is the applicant it must complete OTP Verification or KYC video testing.
5. The application is completed by the MCA to maintain the name of the LLP.
6. Upon receipt of documents the input documents are compiled and sent to partners for signing.
7. A scanned copy of the documents will be uploaded to the AK tax court.
8. The signed documents and application are then submitted for approval to the MCA which takes approximately 2-5 working days.
9. We also help to open a bank account in the name of LLP, in line with the title deed of the LLP Partnership. This statement is signed by all our partners and a stamp must be submitted to the AK tax court within 25 days of Establishment.
10. The Signed Deed is then certified by the involvement manager and uploaded to the MCA Portal within 30 days of consolidation.
Documents required to register LLP in India
To register an LLP in India the following documents are required. We at AK Tax run the LLP registration for as little as Rs.7899.
- PAN Card or Passport if the applicant is foreign.
- Driver’s license or Aadhar card, resident card or election card, or any other proof of identity issued by the government.
- Bank statement less than 3 months old or telephone bill.
- Authorization from the owner of the property (Name mentioned in the electric building or gas or property receipt or deed of sale) to use the premises as a registered office. This serves as a NOC from the landlord as well;
- Proof of proof of any electrical appliances, electricity, telephone showing address of property with the name of the owner or document, not exceeding two months of age.
Benefits of LLP Registration in India
There are a few reasons why people prefer LLP registration in India over the inclusion of Private Limited Company. LLPs are considered to be easy to set up and a flexible business approach. Entrepreneurs find it possible to start their own organization as it has no problems compared to the day-to-day operations. Here, we look at the various benefits of LLP.
Low registration costs: The cost of registering an LLP in India is low compared to that of a limited public or private limited company. You can register for LLP with AK taxes for just 7899.
No small contribution: No LLP can be built with the least amount of money possible, there is no need for a small amount of money in LLP installations.
There are no restrictions on business owners: LLP requires at least 2 partners but there is no such limit for the maximum number of partners. Although in a limited private company there are limits to having more than 200 members.
No mandatory audit requirement: Whether a company is public or private regardless of the amount of shares it is expected that its account will be audited. But here in the case of LLP, there is no such mandatory requirement and this is considered one of the key compliance benefits of building an LLP. A company with limited liability should conduct its research in only two cases.
- If the contribution of LLP exceeds Rs. 25 lakh (or) If the annual profit for LLPs exceeds Rs. 40 lakh.
Tax feature on LLP: LLP is responsible for the payment of income tax and the partner share is tax-free. Thus, no Dividend Distribution Tax (DDT) is payable.
Why choose LLP over Partnership?
The main purpose of introducing LLP in India is to introduce a type of business that offers limited liability to owners and is relatively easy to manage and hassle-free. It is one of the Cooperative firms. Here, we look at the major differences between LLP and co-operative firms.
For AK taxes LLP registration can be done online for only Rs.7899, while co-registration can be done for only Rs.5899.
In LLP partners are not responsible for external lenders. Therefore, partners are responsible for the level of their contribution to LLP. On the contrary, in the case of a co-operative firm the partners have a direct obligation to the lenders. As a result entrepreneurs may deny that they are partners in a co-operative. In LLP partners enjoy limited liability protection.
LLP and both cooperative firms must have at least 2 partners. However, there is no upper limit on the number of partners in LLP. In the event that the number of partners decreases to less than 2 in the partnership for any reason the company will be dissolved. Although in the case of LLP if the number of partners drops below 2, one partner can find a new partner without breaking the LLP.
LLP can change its registered office and open a bank account anywhere in India as it is registered under the Ministry of Business Affairs of India.
The registrar of firms that register co-operatives owned by the state government. Therefore, it is very tedious to operate or deploy all of India and Cooperative firms.
LLP subsistence does not depend on its partners. LLP partners may change over time, but that will not affect the presence, continuity, or performance of LLP.
In the case of a Co-operative firm, the cancellation or death of any spouse will have significant consequences and the Partnership will have to be re-established.
Members can be added to the LLP during compilation or posting. The following people can be partners in LLP:
- Limited credit partnership
- External Limited Debt Partnerships
- Foreign Companies
An LLP agreement must be made and filed within 30 days of the LLP submission. If the LLP fails to enter into an agreement, there is no agreement and the First Schedule to the LLP Act will govern the relationship between the partners and the LLP.
In the event that there is a written agreement and no detailed declaration regarding any of the matters referred to in the first schedule, such matters will be dealt with in the first schedule.
What makes an LLP different from a Private Limited Company?
Entrepreneurs who start a new business are always curious to know the difference between a Private Limited Company and an LLP, as both offer similar features. Here is a comparison between Private Limited Company and LLP from the perspective of an entrepreneur starting a new business.
Registration process: The Private Limited Company registration and LLP registration processes are very similar in some respects to the documents and forms filed for submission.
The following are the steps involved in the installation of Private Limited Company and LLP.
- Obtaining Digital Signature Certificates (DSC) for the proposed directors
- Obtain the Director’s ID number (DIN) of the proposed directors
- Obtaining name approval from the MCA.
- Application for inclusion.
- Both LLP and Private Limited are registered with the Department of Corporate Affairs under Central Government. The processing time for the installation of both private and public limited companies takes approximately 15-20 working days.
Registration Fees: LLPs are designed to meet the needs of small businesses and therefore, the cost of LLP installation is cheaper compared to that of Private Limited Company. LLP registration requires a small number of documents that need to be printed on Non-Justice stamp paper compared to Private Limited Company registration. At AK Tax Private Companies can be registered for just Rs.6899 online here.
Features: Similar features are provided by LLP and Private Limited Company. Both legal entities have different assets and liabilities from those of developers. Although both LLP and Private Limited may be transferable, Private Limited Company offers additional flexibility when it comes to transferring or sharing ownership. Unless the closure promoters or competent authority both the Private Limited Company and the LLP have eternal life.
Ownership: In LLP partners have the ownership and power to manage and control the LLP. Therefore, the Partner in LLP will play a very important role as it will play the role of both owners and manager. Accordingly, flexibility is provided to developers by Private Limited Company when it comes to ownership and sharing ownership.
Compliance: For LLP and Private Limited Company Tax compliance is the same. LLPs enjoy a few benefits when it comes to Compliance with the Department of Business Affairs. LLP does not require its account to be audited if the annual profit of LLP is less than Rs. 40 lakh and the maximum contribution does not exceed Rs. 25 lakh. However, the LLP will be required to complete LLP Form 8 and LLP form 11. In contrast, Private Limited Company will be required to file an annual return to the Ministry of Corporate Affairs each year.
Foreign Ownership of LLP
Amendments to FDI regulation dated 10 November 2015, 100% FDI is now approved by default. 100% FDI is allowed in sectors and operations where 100% FDI is allowed and no FDI-related operating conditions. Therefore, outsiders can now start or invest in LLP.
Government approval was needed before 2015 to invest in LLP by NRIs and outsiders. Thus, the process of LLP implantation by NRIs and outsiders was complicated and costly. Therefore, NRIs and outsiders prefer company registration over LLP. But now, with the relaxation of FDI procedures NRI and outsiders can easily register their LLPs.
Visit AK taxes.com if you are an NRI or a foreigner who wants to start an LLP. We offer LLP registration to NRIs and outsiders from Rs. 8000.
Post-Incorporation Compliance for LLPs
With the installation of the LLP, we at AK Tax help you maintain your basic accounting and compliance with your LLP at an affordable price. The package starts from Rs.7899 per year. The following is the compliance that LLP should follow annually.
Income tax return: Income tax return using the ITR 5 form must be completed by LLPs. The ITR 5 form can be completed online through the income tax website using the digital signatures of a nominated partner.
MCA’s annual refund: LLP Form 11 must be paid on or before May 30th each year. Form 11 contains details of partner numbers, total number of partners, total contribution received by all partners, corporate organization details as partners, and summary of partners. In accordance with this form, 8 must be completed within 30 days from the end of the 6 months of the relevant financial year and other prescribed fees. Therefore, Form 8 of the LLP must be completed by no later than 30 October of each financial year.
In addition, GST registration, GST return completion, and TDS return submission will be required for LLP based on sales and profits.
AK Tax is a market leader in LLP registration services in India, and offers a variety of business registration services such as Private Company Limited, Individual Company Registration, Nidi Company Registration, Section 8 Company Registration, Manufacturer Registration, and of the Indian Company.
Frequently Asked Questions
The LLP must include the annual LLP return on Form 11, the financial statements of the accounts and the solvency, and the income tax return.
LLP Form 8 or statement of account and solvency must be completed annually by all LLP registered in India. It is included in the MCA regardless of the profit.
Partners need to comply with the annual return submission with the MCA, filing an account statement.
There are many rights for LLPs compared to other companies there are freedom to keep minutes, law register, annual general meeting and flexible tax.
Board Meeting is conducted by the Board of Directors, where no BOD is involved in LLPs other than the nominated partners run the entire business and are also responsible for compliance