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LLP Registration in India has become an alternative form of business that provides the advantages of a Company and the flexibility of a Partnership firm into a single organization. The Concept of LLP in India was introduced back in 2008 by the Limited Liability Partnership Act of 2008. This unique hybrid is suitable for setting small, medium-sized businesses.

 

It is very easy to manage and incorporate a Limited Liability Partnership in India. To register an LLP minimum of two partners are required, there is no upper limit as such. The LLP agreement states the rights and the duties of the Partners. In an LLP one partner is not responsible for the misconduct and negligence of the other partner. The partners are responsible for the compliances and all the provisions that are specified in the LLP agreement.

Minimum Requirements For LLP Registration

Process of LLP Registration

Minimum Two Person

Minimum Two Person

Register your Limited Liability Partnership with at least two persons to act as the initially designated partner in the LLP. There is no limit on the maximum number of partners.

One Designated Partner

One Designated Partner

One Designated Partner of the LLP should be resident in India. A Person is considered a resident when it stays in India for over 182 days during the previous financial year

Registered Address

Registered Address

The LLP needs an address for its incorporation; we require the proof of the registered address not older than 2 months and the NOC from the registered address owner.

Capital Requirement

Capital Requirement

The LLP Act does not prescribe any minimum or maximum capital as such; hence you may keep the capital/contribution of the LLP as per the LLP Business requirement.

STEP OF

LLP Registration

Good documentation for the registration of an LLP plays a vital role & results in faster incorporation of the Limited Liability Partnership Firm. Here is the list of documents required; please submit self-attested copies of clear and valid documents.

List of Documents Required For LLP Registration

Documents of Designated Partner & Partner

  • Passport Size Colour Photograph
  • Self-attested Pan Card
  • Self-attested Aadhar Card
  • Address Proof: (any one document)
    1. Telephone Bill
    2. Gas Bill,
    3. Electricity Bill
    4. Bank Statement
  • Identity Proof: (any one document)
    1. Passport
    2. Voter ID
    3. Driving License

Documents For Registered Address

  1. Proof of Premises: Telephone, Electricity, Water Bill
  2. No Objection Certificate (NOC) From Owner
  3. Director NOCQA 

Legal Forms & Declaration

  1. Consent of Partners in Form-9
  2. Subscriber Sheet for LLP Incorporation
  3. PAN Card Application Form
  4. TAN Card Application Form

Benefits of the LLP

Easy to form

Forming LLP is an easy process. It is less complicated and time-consuming unlike the process of formation of a company. We help startups to start their LLP in 100% online mode to avoid unnecessary delay.

Limited Liability

The partners of the LLP have limited liability which means partners are not liable to pay the debts of the LLP from their assets. No partner is responsible for any other partner’s misconduct.

Perpetual Succession

The LLP Being a separate legal person, its life or existance is is independent of the partner’s death, retirement, or insolvency. The LLP will get wound up only as per provisions of the LLP Act.

Easy Restructuring

The relationship between the partners is governed by an LLP Agreement, which can be easily amended to introduce or retire a partner. The process is easy and straight forward.

No Compulsory Audit

Under the LLP Act, the statutory audit is not mandatory for small LLP. However, the statutory audit by a CA becomes compulsory only when the annual turnover and the LLP cross Rs 40 Lakh or the LLP Capital is more than 25 Lakh.

Fewer Compliance

The compliance requirement for an LLP is fewer in comparison to a company. Also, the annual return filing is easy and cost-effective. The LLP has to file its ITR just like any other business and file ROCAnnual Returns.

Taxation of Limited Liability Partnership

The LLP is considered a Partnership Firm for the Income Tax Act; all the provisions applicable to the partnership firm also applies to the LLP. Following are the important tax considerations in the case of LLP

Income Tax

 No  Particulars  Rate
 1  Income Tax  30% on the profits of LLP
 2  Surcharge  12% on the Income Tax, if the taxable income is more than one crores.
 3  Health & Education Cess  4% on the amount of Income Tax and Surcharge (if any)
 4  AMT  Alternative Minimum Tax: The LLP can not pay less than 9% Plus Cess of the adjusted total income U/s 115 JC

 

Limit on Partner Remuneration: The LLP Can pay remuneration to its Working Partners Only, subject to a specific clause regarding the payment of compensation to the partner. However, such managerial remuneration should be within the prescribed limit under the Income Tax Act.

 

 No   Book Profit   Amount Allowed as Remuneration U/s 40B 
 1  Up to 3 Lakhs of book Profit.  1.5 Lakh or 90% o the Book Profit Whichever is higher
 2  On Excess of Rs. 3,00,000/-  60% of the Book Profit after the first Rs. 3 Lakhs.

Annual Compliance for the LLP

The LLP is considered a Partnership Firm for the Income Tax Act; all the provisions applicable to the partnership firm also applies to the LLP. Following are the important tax considerations in the case of LLP

The LLP Has to file Income Tax and ROC Return every year. Here is a brief note on the annual compliance.

 

 No   Annual Filing   Particulars 
 1  Account   Finalisation  At the end of the FY, the LLP must finalise their books of account and prepare a statement of income and expenditure and the balance sheet in compliance with the LLP Act and the Income Tax Laws.
 2  Statutory   Audit  A statutory audit is not required for small LLP. However, it becomes mandatory when the turnover of the LLP is over Rs. 40 Lakhs or the Capital of the LLP is more than Rs 25 Lakh
 3  Income Tax   Return  Every year the Income Tax for the LLP is filed as per the following due dates.

 

 No  Situation  Due Date
 1  No Audit Cases  31st July
 2  Audit Cases  30 th October

 
 4  Form 11  Form 11 is the annual return of the LLP to the Registrar of Companies and is mandatory filing before the 30th of May of the next year for every financial year.
 5  Form 8  The LLP need to file their financial information and a statement of solvency to the ROC in form 8. The last date of filing Form 8 is 30th October for the previous financial year.

Frequently Asked Questions

What is LLP?

An LLP is a new form of body corporate introduced in India through the LLP Act, 2008. An LLP in India is an advancement over the existing partnership firm with advantages of corporate structure such as the limitation on the liability of the partners. An LLP is considered as a separate legal entity, perpetual succession, with the liability of partners limited to the capital being contributed by them. Hence, a shareholder is not personally liable for the debts of the company.

For small businesses, what are the benefits of LLP?

The LLP is the most suitable form of business for small businesses in India, where there are fewer regulations to comply with. Unlike a company, audits are not necessary till the turnover crosses 40 Lac or the capital crosses 25 lac. Hence we can say that the LLP Company Registration is beneficial for small business.

Is the LLP structure suitable for my business?

As said before, the most significant advantage of starting a business with an LLP form of organisation is the outlook by all outside parties towards the business. Though the decision of whether to set up the business as a Limited Liability Partnership or not, rests upon you, it is advised that the entrepreneur closely evaluate all the merits and demerits. To analyse the suitability of the LLP in your situation, please contact us.
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