[Company Registration India] Requirements And Process For LLP Registration In India
Indian entrepreneurs in the initial stages majorly face issues in the legal side of business like certificates, registrations and compliances.
It is quite understandable as Indians emphasize government jobs, and are not familiar with the business ecosystem.
And if you are a startup founder, you can examine by taking your startup as an example.
Find out how much your startup is up to date with the required registrations, compliances and certificates.
Do you know how to register a company?
Or, which company registration type is most suitable for your business?
In this article, we will talk about, in-depth, different sides of a Limited Liability Partnership.
Here, you will learn in detail
- The procedure of registering Limited Liability Partnership firm
- Advantages and disadvantages of a Limited Liability Partnership
- Requirements To Start Limited Liability Partnership
- Documents required for Limited Liability Partnership registration
But before going straight in details, let us first talk about Limited Liability Partnership.
Related Article: How to Register a Private Ltd Company
What Is A Limited Liability Partnership?
LLP is an acronym for Limited Liability Partnership and is an alternative corporate business form, others being Private Ltd, Company and One Person Company.
Limited Liability Partnership is called a hybrid between a company and a partnership as it gives the benefits of limited liability of a company and the flexibility of a partnership.
In an LLP, each business partner has limited liability, which means they do not stand responsible for any loss, debts or liabilities that the business might face.
Advantages Of A Limited Liability Partnership
(i) Requires less time to set up
Setting up an LLP is easy, less expensive and requires less time to set up.
(ii) Organized structure
Limited Liability Partnership provides an organized structure to a business and operates based on an agreement.
(iii) Taxation benefits
In an LLP, rate of tax is less when compared to other business types and is also exempted from various taxes such as dividend distribution tax and minimum alternative tax.
(iv) Provides Flexibility
Limited Liability Partnership provides flexibility without imposing detailed legal and procedural requirements.
(v) Easy Transfer Procedure
Transference of ownership is easy in an LLP, with no restrictions on joining and leaving.
Disadvantages Of LLP
(i) Less credible:
Considering other business forms, people do not consider LLPs to be a credible business.
Despite many benefits an LLP possess, people still trust other company forms over LLPs.
(ii) State Wise Exception:
Because of state-wise variations in tax benefits and some LLP formation restrictions, it can be disadvantageous to set up an LLP.
Requirements To Set up a Limited Liability Partnership
Digital Signature Certificate:
It is a digital certificate used to validate and certify the identity of the person holding this certificate.
Issued by the certifying authorities, an DSC is a secure digital key that makes use of the public key encryptions to create the signatures.
Digital Signature Certificate contains useful information of the user, i.e. name, pin code, country, email address, date of issuance of the certificate and name of the certifying authority.
Director Identification Number (DIN)
Allotted by the Central Government, Director Identification Number is an 8-digit unique identification number given to any person planning to be a director or an existing director of a company.
It is an 8-digit unique identification number with lifetime validity and through which details of the directors are maintained in a database.
Designated Partner Identification Number
DPIN is an identification number required by a person who wishes to register an LLP or become a Designated Partner of an existing LLP. All designated partners of the proposed LLP shall obtain a Designated Partner Identification Number (DPIN).[Note: In case you already have a DIN (Director Identification Number), it can be used as a DPIN.]
As the name suggests, it is a written agreement between the partners of the LLP or between the LLP and its designated partners.
LLP Agreement sets in place the rights and duties of the designated partners toward each other and the LLP.[Read: Benefits Of Filing Patent For Startups In India]
Documents Required To Register A Limited Liability Partnership
- PAN Card/ ID Proof of the Partners
- Address Proof of the partners
- Proof of Registered Office Address
- Residence Proof of Partners
- Digital Signature Certificate
- Designated Partner Identification Number
- Passport (in case of Foreign Nationals/ NRIs)
How To Register A Limited Liability Partnership
- Step 1: Apply and obtain a DSC (Digital Signature Certificate)
- Step 2: Apply for the DPIN (Designated Partner Identification Number, Form 7 is required)
- Step 3: Apply for the name availability and approval (requires Form 1/ RUN-LLP)
- Step4: Incorporation of LLP (requires Form 2/FiLLiP)
- Step5: File for LLP Agreement (requires Form 3)
For company registration in India, contact The StartupLab.