In short, LLP is a company in which at least two partners are required and can have a maximum number of members as they need. The responsibility of an LLP’s participants is restricted. In LLP, for the negligence of some other partner, one partner would not be accountable. The partner will be held responsible only for his own actions.
Limited liability partnership is an alternative corporate business that gives the benefits of limited liability as present in a company and the flexibility of partnership business and it provides the benefits of both worlds by introducing smoothness in the management of a collaborative business and the reach of the company’s growth.
The greatest benefit of LLP from a corporation over a Pvt Ltd firm is that there is a smaller threshold for compliance relative to a firm. A limited liability partnership can be started by at least two partners. and there really is no cap on the overall number of partners involved.
The minimum capital for which an LLP may be implemented is Rs. 10,00/-but there really is no maximum limit. Anyone appointed partner should be an Indian citizen in India or reside in India by at least 182 days in the preceding FY.
Documents required to register for LLP: –
Documents of Partners:
- For ID Proof – All partners have to provide a PAN card for Id proof.
- Address Proof of the partners – Partners can submit Voter’s ID, Passport, Driver’s license, or Aadhar Card. Please keep in mind that it should match with PAN card
- Residence Proof of Partners – Latest copy of any of the following documents – bank statement, telephone bill, mobile bill, electricity bill, or gas bill
- Passport size photograph
- Passport if you belong to the non-resident or NRI category
Documents of LLP:
- Proof of Registered Office Address
- Digital Signature Certificate
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How to form a limited liability partnership-
To qualify to become an Indian LLP, you must apply first for a DSIN (DPIN) that can be achieved by uploading the DIN or DPIN eForm. You will then need to receive your Digital Signature Credential and register the same with the portal. After that, you need to have the name of the LLP authorized by the Ministry. If the name of the LLP has been accepted, you can register the LLP by sending an incorporation form.
Step 1: Application for DIN or DPIN
DPIN shall be obtained by all authorized LLP members. To get DIN or DPIN, you must file eForm DIR-3. In some situations when any member has a DIN, then it could be used as a DPIN.
Step 2: Acquire/ Register DSC
The IT Act, 2000 allows the use of digital signatures on submissions made in digital form in order to make sure the confidentiality and validity of documents filed in digital form. It’s the only safe and genuine manner in which a paper can be sent digitally. As such, all filings made by the LLP(s) must be submitted using Digital Signatures by the individual allowed to sign the papers.
Obtain DSC-The Approved Certifying Authority (CA) provides a digital signature. Certifying Authority means an individual authorized to deliver a digital signature certificate pursuant to Section 24 of the Indian IT-Act 2000.
Register DSC-Role tests can be carried out only when the signatory has registered their Digital Signature Certificate (DSC) with the LLP program.
Step 3: New User Registration
To submit an eForm or to make use of any premium service on the LLP site, you must first enroll as a user in the specific user group, such as registered users and business users.
Step 4: Incorporate an LLP
Apply for the LLP name. Afterward, based on the suggested LLP, submit the appropriate incorporation form.
And once an application has indeed been accepted by the authority in consideration of the ministry, you can get a notification about it which may adjust the application classification to Approved.
Step 5: File LLP Agreement
The original agreement is to be submitted within 30 days of the implementation of LLP. The consumer must apply the details in form 3.