The Limited Liability Partnership Act 2008 was published in the official Gazette of India on 9 January 2009 and has been notified with effect from 31 March 2009. LLP is different from a Limited Partnership. It operates like a limited partnership, but in LLP each member is protected from personal liability, except to the extent of their capital contribution in the LLP. It will have perpetual succession. Indian Partnership Act, 1932 shall not be applicable to LLPs and there shall not be any upper limit on number of partners in an LLP unlike an ordinary partnership firm where the maximum number of partners can not exceed 20, LLP Act makes a mandatory statement where one of the partners to the LLP should be an Indian. LLP is one of the easiest form of business to incorporate and manage in India, as there is less compliances LLP is preferred by Professionals, Micro and Small businesses that are rune by closely held members or by family members. As LLPs can not issue equity shares, LLP should be used for any business that has no plans for raising equity funds in future.
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Limited Liability Partnership
A Limited Liability Partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. LLP therefore exhibits elements of partnerships and corporations.
♦ Limited Liability Partnership Registration in India
A Limited Liability Partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. LLP therefore exhibits elements of partnerships and corporations.
Features
No requirement of minimum capital: In the case of companies there should be a minimum amount of capital that should be brought by the members or owners who want to form it. But to start an LLP there is no requirement of minimum capital.
Minimum number of members: To start a limited liability partnership at least two members are required initially. However, there is no limit on the maximum number of partners.
No requirement of compulsory audit: All the companies, whether private or public, irrespective of their share capital, are required to get their accounts audited. But in case of LLP, there is no such mandatory requirement. A limited liability partnership is required to get the audit done only if: (A) If the contributions of the LLP exceeds ₹ 25 lakhs. (B) If the annual turnover of the LLP exceeds ₹ 40 lakhs.
Separate legal entity: Like a company, LLP also has a separate legal entity. So the partners and the LLP in are distinct from each other. This is like a company where partners are different from the company.
LLP can access to foreign equity funds under the automatic route. No RBI approval is required.
Easy Transferable Ownership- It is relatively easy to transfer the ownership of an LLP to another person as compared to other business forms, a partner can easily enter or exit from LLP.
Documents Required for LLP Registration
Scanned copy of PAN Card or Passport (Foreign Nationals & NRIs)
Scanned copy of Voter’s ID/Passport/Driver’s License
Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
Scanned passport-sized photograph
Specimen signature (blank document with signature partners only)
Note: Any one of the partners must self-attest the first three documents. In case of foreign nationals and NRIs, all the documents must be notarized (if currently in India or a non-Commonwealth country) or apostilled (if in a Commonwealth country).
Documents Required For the Registered Address
Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
Scanned copy of Notarized Rental Agreement in English
Scanned copy of No-objection Certificate from property owner
Scanned copy of Sale Deed/Property Deed in English (in case of owned property)
Note: Your registered office need not be a commercial space; it can be your residence, too.