Limited Liability Partnership
In the recent times of growth, LLP i.e. Limited Liability Partnerships have gained a lot of importance. LLP Registration has been made a simplified task once you associate with DCS. Where, at one place it gives you the benefits of Limited Liability of a Company, at the same time it also gives you the flexibility of organizing your internal structure as a Partnership. Yet, there are not many who can guide you with the details & intricacies of LLP Formation. The young and well-versed team at DCS explains to you every piece of detail about the LLP Act and lets you be your own decision maker with complete knowledge. You will have direct contact with the Team Leader engaged in your project to have all the information and update you require. DCS also ensures you post LLP Registration Services which one must needs to comply with.
The main governing document of a Limited Liability Partnership is the LLP Agreement. With your basic details we shall draft a clear unambiguous LLP Agreement which will demonstrate the mutual rights & duties of the partners inter se and those with the LLP.
Like the Indian Companies, LLPs shall also be registered with the Registrar of Companies by due filing of various electronic forms for Name Approval, Incorporation of LLP, etc. Here at DCS, the process of incorporation of LLP has been made free of any botheration for you. All you need to do is fulfill our checklist and all your troubles end right there.
Obtaining PAN& TAN has been made inevitable by the Income Tax Department for any LLP registered in India. In your association with DCS you don't have to go anywhere else for these services auxiliary to LLP Registration. In addition to your LLP's Incorporation we will also look into the PAN & TAN Registrations with the Income Tax Department.
Frequently Asked Questions
LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
- LLP is a body corporate and a legal entity separate from its partners;
- 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 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;
- Indian Partnership Act, 1932 shall not apply to LLP.
- The mutual rights between the partners of LLP are governed by the LLP agreement.
- Renowned and accepted form of business worldwide.
- Low cost of Formation.
- Easy to establish.
- Easy to manage & run.
- No requirement of any minimum capital contribution.
- No restrictions as to maximum number of partners.
- LLP & its partners are distinct from each other.
- Partners are not liable for Act of partners.
- Less Compliance level.
- No exposure to personal assets of the partners except in case of fraud.
- Fewer requirements as to maintenance of statutory records.
- Less Government Intervention.
- Easy to dissolve or wind-up.
Professionals can form Multi-disciplinary Professional LLP, which was not allowed earlier.
A minimum of two partners will be required for formation of an LLP. There is no limit on the maximum number of partners.
Yes, a body corporate may be a partner of an LLP.
Any individual or body corporate may be a partner in a LLP. However an individual shall not be capable of becoming a partner of a LLP, if:
- has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;
- is an undischarged insolvent; or
- He has applied to be adjudicated as an insolvent and his application is pending.
Only an individual can be appointed as a 'Designated Partner' and at least one of the Designated Partner shall be a resident of India. In case of a LLP in which all the partners are bodies corporate or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.
Designated Partner's Identification Number (DPIN) is a eight digit numeric number granted to any person intending to be appointed as Designated Partner for the purpose of its identification, on the lines similar to Director's Identification Number (DIN) required for Directors in case of Companies. Every Designated Partner is required to have atleast a provisional DPIN for forming a LLP.
Designated Partners are partners who are responsible for managing the compliance under the LLP Act and Managing Partner are partners , who are managing the business of the Firm and therefore it is not necessary that a Designated Partner is also a Managing Partner & vice versa.
No, Only an Individual or Body corporate can be partner and the definition of Body Corporate does not include partnership in its ambit. However any partner of the Partnership firm in his individual capacity can hold partnership in LLP.
In reference to LLP, contribution can be termed as, what a partner is contributing towards the Limited Liability Partnership for running of his business. Contribution in case of LLP is alike Share Capital in case of Company.
Only the Limited Liability Partnership whose contribution exceed Rs. 25 Lakhs or the Limited Liability Partnership whose turnover exceed Rs. 40 Lakhs are required to annually get their accounts audited by any Chartered Accountant in practice.
Every LLP shall be under 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 of LLP every year.
LLP incorporated in India will be assessed as if it is a partnership firm. LLPs are in the same parlance as partnership firms so far tax provisions are concerned and therefore Minimum Alternate Tax and Dividend Distribution Tax will not be applicable for LLP.
No, the profit sharing ratio can be decided as per the LLP Agreement and the same can have the provision of non- profit sharing partner.
To register an Indian LLP, we need to first apply for a Designated Partner Identification Number (DPIN), which can be done by filing eForm for acquiring the DIN or DPIN. We would then need to acquire your Digital Signature Certificate and register the same on the portal.
Thereafter, we need to get the LLP name approved by the Ministry. Once the LLP name is approved, we can register the LLP by filing the incorporation form.
Step 1: Application for DIN or DPIN
All designated partners of the proposed LLP shall obtain “Designated Partner Identification Number (DPIN)”. We need to file eForm DIR-3 in order to obtain DIN or DPIN. In case one already have DIN (Director Identification Number), the same can be used as a DPIN.
Step 2: Acquire/ Register DSC
Digital Signature is the only secure and authentic way that a document can be submitted electronically. As such, all filings done by the LLP(s) are required to be filed with the use of Digital Signatures by the person authorized to sign the documents.
Step 3: Incorporate a LLP
Apply for the name of the LLP to be registered by filing Form 1 (Application for reservation or change of name) for the same. After that depending upon the proposed LLP, file required incorporation Form 2 (Incorporation document and Subscriber’s statement)
Once the form has been approved by the concerned official of the Ministry, One will receive an email regarding the same and the status of the form will get changed to Approved.
Step 4: File LLP Agreement
After incorporation of LLP, an initial LLP agreement is to be filed within 30 days of incorporation of LLP. The user has to file the information in Form 3 (Information with regard to Limited Liability Partnership Agreement and changes, if any, made therein).
OPC (One Person Company)
The Concept of One Person Company (OPC), is a new form of company introduced by the Companies Act, 2013 which enables the entrepreneur working as a sole proprietor enter the corporate framework.
It combines the feature of both Sole Proprietorship and Company form of Businesses.
OPC is registered as a Private Limited Company.
Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC.
For the above purpose, the term "resident in India" means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year.
Further, minors can neither be members or nominees in an OPC.
An Individual can be a Nominee in only one OPC.
An OPC, being registered as a Private Limited Company, there is no minimum limited Prescribed.
The tax rate applicable on an OPC is 30%.
An OPC has the option to dispense with the requirement of holding the AGM.
23.Is there any threshold limits for an OPC to mandatory get converted into either private or public company?
In case the paid up share capital of an OPC exceeds fifty lakhs Rupees or its average annual turnover exceeds during the relevant period exceeds two Crore rupees, then the OPC has to mandatorily convert into Private or public Company.
24. What if member of an OPC becomes a member in another OPC by virtue of being a nominee in that other OPC?
Where a natural person, being member in One Person Company becomes a member in another OPC by virtue of his being a nominee in that OPC, then such person shall meet the eligibility criteria of being a member in only one OPC within a period of one hundred and eighty days, i.e., he/she shall withdraw his membership from either of the OPCs within one hundred and eighty days.