What Is Limited Liability Partnership - Limited Liability Partnerships (LLPs) are special entities that have the advantages of traditional partnerships and private limited companies. Limited liability status is enjoyed by the partners of a limited liability partnership. The process of registering a limited liability partnership is straightforward. However, it is important to get help from a third party for LLP registration in India.
A limited liability partnership is commonly known as an LLP. This is a special form of business structure that has the features of a traditional partnership and benefits from limited liability enjoyed by LLP partners.
What Is Limited Liability Partnership
This form of business entity is preferred by individuals over other forms of business structure because the amount of flexibility offered by this form of entity is greater than other forms of entity.
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This form of business structure has been developed and used in different forms in common law jurisdictions such as the United Kingdom, South Africa and New Zealand.
In general, law firms, accounting firms, private equity, venture capitalists, architects and real estate firms go into this type of entity. Some of the benefits offered by this business structure are limitation of liability and ease of compliance is also achieved by using this form of business structure. So individuals and entrepreneurs prefer to register for limited liability partnership registration. Another added benefit of forming an LLP is the ease of doing business.
To understand the meaning of limited liability partnership, first you need to know the meaning of partnership. Partnership can be understood as a form of contract or agreement between two or more people to carry out various types of business activities with the common goal of sharing the profits and losses of the business. This definition is in the Indian Partnership Act, 1932.
Limited Liability Partnerships (LLPs) are defined in the Limited Liability Partnership Act, 2008 (LLP Act) as special entities that have the characteristics of a traditional partnership and also the limited liability status enjoyed by private limited companies. In India, LLPs were introduced in 2010. Any obligations arising from the partnership will be settled in the relevant agreement under the LLP Act.
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One of the main advantages of limited liability partnership registration is limited liability. Partners in this form of business structure do not have a problem if the debt is not paid. Due to the concept of limited liability, creditors cannot take personal assets of partners for debts owed by the LLP.
Another benefit enjoyed by this type of business organization is the benefit of a traditional partnership. For example, there is minimal compliance for this type of entity.
Unlike other forms of business entity, transfer of ownership for LLP can be done easily. Hence, individuals prefer to register for limited liability partnership registration.
One of the factors that makes this business entity attractive is the principle of separate and independent legal entities. Corporate partners can enjoy such benefits.
Llp Means Limited Liability Partnership. Llp Registration Process In India Is Administered By The Registrar Of Companies India (roc)
This means that once a partnership is formed, the LLP will continue to exist until and unless it is caused by the order or direction of the regulatory authority.
One of the advantages of individuals who want to sign up for limited liability is that disputes can be handled properly. Just as shareholders' agreements are drafted for private limited companies, LLP agreements are drafted for limited liability partnership entities. Through this agreement, all kinds of disputes arising between partners can be easily resolved.
LLPs require limited compliance compared to other forms of business entities. For example, there is no minimum capital requirement for limited liability partnership registration. Apart from this there is no requirement to conduct an audit. However, this requirement applies only when the annual turnover of the LLP is less than 40 lakhs and 25 lakhs.
The primary regulatory authority for registration of limited liability partnerships in India is the Ministry of Corporate Affairs (MCA). It is the main authority for all types of LLP registration in India.
What Is Limited Liability Partnership?
Minimum number of partners required for registration of limited liability partnership in India. The minimum number of partners for an LLP is two. Companies can also be classified as LLP partners.
Of all the partners in a Limited Liability Partnership, one of them must be a citizen of India. This is a mandatory requirement for LLPs in India.
In addition, the office must have an actual physical location to conduct daily correspondence with various regulatory authorities. This requirement is mandatory as per the Limited Liability Partnership Act, 2008.
Securing a digital signature certificate is a mandatory requirement for all LLP partners. This will help in filing documents and signatures in digital and electronic form.
What Is Limited Liability Partnership (llp)
In the next step, the partner must apply for a digital signature certificate. This certificate will help LLP partners to sign documents in electronic as well as digital format. DSC is required by at least one partner to sign the document. After this, partners must secure the designated partnership identification number. DPIN is required for all partners of the partnership. This can be obtained by filing Form DIR-3.
The name of the partnership is verified by one of the partners. This process can be done using the LLP RUN form. Once the partnership name is reserved, it can be used for 90 days. After this period, the name will not be protected. The name must not violate any provisions relating to trademark law or applicable copyright law. In addition, the name should not offend. At least two names can be reserved for a partnership.
After the name is reserved, the Registrar of Companies (ROC) requires all partners to submit the necessary documents for the partnership. These documents will include incorporation documents, personal identification documents such as PAN card, Aadhaar card and passport.
The LLP agreement should be carefully drafted. This agreement must state the responsibilities and obligations of all partners of the limited liability partnership. Any partner or person intending to register a Limited Liability Partnership will need special advice when drafting the agreement. It is recommended to use a skilled service such as drafting your LLP agreement. Once the LLP agreement is drafted, it must be filed within 30 days on the ROC or MCA portal. This should be done through Form 3.
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When all the above steps are completed, the partner should apply for LLP registration certificate. Along with this the partner should apply for LLPIN (Limited Liability Partnership Identification Number).
Once an LLP is incorporated; There are several post-compliance requirements that must be followed. Incorporation is carried out by LLP:
There are several differences between an LLP and a traditional partnership. First and foremost as the regulation of traditional partnerships governed by the provisions of the Partnership Act, 1932. Limited Liability Partnerships governed by the provisions of the Act, 2008. In addition, the requirements of limited liability are present. In the LLP that is absent from the partnership.
Registering a limited liability partnership registration will definitely be worth it because the partners will get the benefits of limited liability. Therefore, creditors will not go after the personal assets of the partners in any case of debt owed by the partnership.
Limited Liability Company Llc Vs. Limited Liability Partnership Llp
• Section 35 of the Act requires the LLP to file Form 11 with the ROC within 60 days. This is the annual compensation earned by LLP. Failure to comply will attract a penalty of Rs. 100 per day.
• Section 34 states that statement of accounts and solvency report must be submitted by LLP.
No. LLC stands for Limited Liability Corporation and LLP stands for Limited Liability Partnership. LLCs are used for both private and public companies. However, this term is not used in India.
One of the main advantages of limited liability partnership registration is the principle of limited liability. Partners in an LLP can be exempted from any liability.
Limited Liability Partnership (llp)
Yes GST will apply as LLP is a separate legal entity. Moreover, any service provided by an LLP will attract some form of GST. LLP has a PAN card; Hence the entity will be charged the GST rate.
No. Appointment of officers is not mandatory for LLP. Hence, there is no need to appoint officials like Company Secretary or CEO under this Act.
The Registrar has all final powers in case of non-compliance with the provisions of the LLP Act. The Registrar may summon all nominated officers of the LLP for non-compliance with the relevant provisions of the LLP.
Yes it can be a private limited company
How To Dissolve A Partnership
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