LLP Registration Services

The Limited Liability Partnership (LLP) is a unique legal structure that combines the benefits of a traditional partnership with the limited liability protection of a corporation. This hybrid model allows entrepreneurs and professionals to collaborate while safeguarding their personal assets from any liability that emerges from their partnership. Hence, the partners in an LLP are not personally liable for the business's debts or the tortious damages of other partners.

LLP is a preferred option for various ventures, from startups to established businesses. Since LLP has a separate legal identity, it can own property, enter into contracts and continue its functions even if a partner changes (perpetual succession). In India, 2 or more individuals can join to form a partnership and enter into the LLP agreement. LLPs are governed by the Registrar of Companies (ROC) and the Ministry of Corporate Affairs (MCA) in India.

Advantages and Benefits of LLP

The decision to register an LLP in India provides you with a large number of benefits that can significantly benefit your business. The LLP registration process provides your business with a structure that encourages growth, mitigates risks and consolidates operations. Now let's look into the key benefits that make LLPs a convincing choice for entrepreneurs and professionals alike.

Our Services

At Benchmark, we provide you with a range of services to help to complete your LLP registration and compliance needs. From securing your LLP's name to managing ongoing regulatory requirements, our expert team handles each step with precision, ensuring a smooth setup and seamless compliance. Here is a list of services we do as part of your LLP registration:

• Advisory on the suitability of an LLP structure compared to other business formats based on your operational and tax requirements.
• Guidance on drafting the LLP Agreement, defining profit-sharing ratios, partner roles, and management structures.
• Assistance in selecting and reserving the LLP name, ensuring compliance with naming conventions and trademark laws.
• Preparation and filing of Form FiLLiP (Form for incorporation of Limited Liability Partnership) with the Ministry of Corporate Affairs (MCA).
• Drafting and notarization of partner consent letters and other declarations required for incorporation.
• Assistance in determining the contribution structure, whether monetary, property, or in-kind, and its valuation.
• Verification and submission of registered office documentation, including NOC from the owner and supporting address proofs.
• Post-registration filing for GST, Professional Tax, and MSME (if applicable) registrations.
• Establishment of systems for maintaining mandatory books of accounts and filing annual compliance forms (Form 8 and Form 11).
• Comprehensive support for obtaining the LLP Identification Number (LLPIN) and setting up a PAN and TAN for the LLP.

Challenges of Limited Liability Partnership

While LLP offers numerous advantages, it's important to consider the hidden challenges that may arise during your LLP incorporation and operations. Here is a list of disadvantages you may have to face:

• Public disclosure of financials is one of the main disadvantages of LLP. Limited Liability companies have to submit their financial accounts to the Companies House for the public record.
• LLPs have to face higher tax rates than the companies. The tax rate for LLPs is 30% on the total income and there is a surcharge of 12% if the income exceeds 1 crore.
• Have to face penalties for non-compliance of LLPs. Failure to file necessary documents or returns on time can result in fines.
• LLPs have limited funding options compared to the ones companies have to raise the funds. LLPs cannot issue equity shares, restricting their ability to raise capital through equity investments.
• No direct tax benefits for the partners. Under LLP partner's income is taxed at individual rates eliminating potential tax advantages associated with corporate structures.

LLP Registration Process

The process of LLP registration in India has a series of well-defined steps ensuring proper compliance with the Limited Liability Partnership Act 2008. So let’s look at the step-by-step process of LLP registration.

Some key points to keep in mind:

• Name availability: The chosen LLP name must be unique and shouldn’t resemble any of the existing LLP, company, or registered trademarks.
• Designated partners: An LLP must have at least two designated partners, one of which must be an Indian resident.
• Registered office: The LLP must have a registered office in India where all official communications and notices can be addressed.
• LLP agreement: The LLP agreement is crucial for defining the internal structure and operations of the LLP.

Documents required for LLP registration

Your LLP registration process starts with collecting all the necessary documents and submitting these documents to the Registrar of Companies (ROC). The following outlines the essential documents needed to register your LLP:

• Proof of identity and address for all designated partners and partners
  • Passport/ Aadhar card/ Voter ID/ Driver's Licence of partners,
  • PAN card, and
  • Utility bills or Bank Statements as address proof.
• Proof of registered office address: This can be a recent utility bill (not older than 2 months), a rental agreement or a lease deed, or a or No Objection Certificate (NOC)
• Consent to act as a designated partner: In an LLP two partners should act as designated partners and they should provide written consent confirming their willingness to take up the duties associated with the role.
• Detail of LLP(s) and/or company(s) in which partner/designated partner is a director/partner: If any partner or designated partner is already a director in a company or a partner in another LLP, details of such companies or LLPs must be provided.

Checklist for LLP registration

The following checklist outlines the essential steps involved in the LLP registration process in India:

• Obtain DPIN for designated partners.
• Acquire DSC for designated partners.
• Reserve the LLP name.
• File incorporation document (e-Form FiLLiP).
• Receive Certificate of Incorporation.
• Apply for PAN and TAN.
• Draft and file LLP agreement (e-Form 3).
• Open a current bank account.
• Maintain compliance with annual filings.

Things that might delay a LLP registration process

While the path to LLP registration is clearly laid out, there can be certain potential obstacles that arise, resulting in delays. By understanding these potential challenges, you can understand the registration process more effectively and efficiently.

• The Registrar of Companies (ROC) may take time to review and approve your proposed LLP name, especially if it's similar to an existing entity or trademark.
• If there are any sort of errors or omissions in the submitted documents then it can also cause a delay in the registration process.
• The online filing system may experience technical issues or downtime, impacting your ability to submit documents on time.
• In some cases, the ROC may conduct additional scrutiny or request further clarifications, resulting in extended processing times.

LLP reference forms

The LLP registration process in India involves the submission of various forms to the Registrar of Companies (ROC). Each form serves a specific purpose in the incorporation and ongoing compliance of the LLP.

Compliance after registering the LLP

Limited Liability Partnerships in India have specific compliance requirements that have to be taken care of to maintain their legal status and operational integrity, Here are a few compliance requirements to be fulfilled:

• Must do annual filing: LLPs have to file their annual returns with the Registrar of Companies within the prescribed time frame.
• Prepare financial statements: LLPs must prepare and file their financial statements that are audited by a Chartered Accountant.
• File ITR: LLPs must file their income tax returns annually with the Income Tax Department.
• Report change in partnership: If there is any change in the LLP agreement or in the partners then that should be updated to the ROC.
• Statutory registers: LLPs should maintain and update statutory registers, including those related to partners, meetings, and resolutions.

Bottom Line:

At Benchmark, we recognise the challenges that your business may face when it comes to LLP incorporation. We commit ourselves in providing comprehensive support, with an efficient and legally compliant registration process. From DPIN acquisition to drafting the LLP agreement, we handle every step with precise attention to detail.

FAQs

Can a foreign national become a partner in an LLP in India?

Yes, a foreign national can become a partner in an LLP. There is only one rule that at least one designated partner in an LLP must be an Indian resident.

Can an LLP be converted into another business structure?

Yes, you can convert an LLP into a private company or an unlisted public company, subject to fulfilling certain conditions.

How long does the LLP registration process typically take?

The LLP registration process takes up to 15 to 20 days, depending on the complexity of the application and the workload of the Registrar of Companies.

Can an LLP operate in multiple states?

Yes, an LLP registered in India can operate in multiple states without the need for additional registration. However, the LLP must have a registered office in one of the states, and all official documents should reflect this address.

Can LLPs raise capital through equity investments?

No, LLPs cannot issue equity shares and thus have limited funding options compared to companies.