Limited Liability Partnership (LLP)

What is a Limited Liability Partnership firm (LLP) in India?

A Limited Liability Partnership (LLP) is a favored business structure offering partners protection from personal liabilities arising from business debts, liabilities, or damages. Operating as a distinct legal entity apart from its partners, an LLP enjoys perpetual succession across all states, governed by the LLP Act of 2008. An LLP (Limited Liability Partnership) serves as a corporate business structure that extends the invaluable benefit of limited liability to its members, akin to a traditional company. This unique framework empowers partners to oversee internal operations based on mutually agreed-upon terms, resembling the structure of a partnership firm.

Key Features of Limited Liability Partnership (LLP)

• Hybrid Nature: LLPs seamlessly blend elements of both corporate structures and partnership firms, offering a harmonious synergy that combines the strengths of each.

• Limited Liability: Partners are shielded from personal liability, safeguarding their assets from the impact of business-related debts and obligations, much like in a corporate setup.

• Flexible Governance: LLPs afford partners the autonomy to manage internal affairs according to the provisions outlined in the LLP Agreement, fostering a collaborative approach to decision-making.

• Diverse Contributions: Partners are mandated to contribute to the LLP in alignment with the specifications delineated in the LLP Agreement. These contributions encompass a wide spectrum of assets, including tangible or intangible resources, movable or immovable properties, monetary investments, and cash reserves.

• Minimum Partner Requirements for LLP: For formation of LLP (Limited Liability Partnership), it is mandatory to have a minimum of two partners. Among these partners, at least two must be individuals who serve as designated partners. Additionally, at least one designated partner is required to be a resident of India, ensuring local representation within the LLP's leadership structure.

• Maximum Number of Partner Requirement for LLP: Importantly, there is no upper limit imposed on the number of partners an LLP can have. This flexibility allows for scalability and accommodates the growth and expansion of the LLP without constraints.

Benefits of Choosing an LLP

• Enhanced Credibility: Opting for an LLP structure can enhance the credibility and reputation of the business, as it signifies a commitment to transparency, accountability, and professional governance practices.

• Partnership Benefits: Partners in an LLP can benefit from shared expertise, resources, and networks, fostering collaboration and synergy among partners. This collective approach can lead to innovative solutions, increased efficiency, and overall business success.

• Ease of Compliance: Compared to a company, LLPs typically have simpler compliance requirements, reducing administrative burdens and costs. This streamlined approach allows partners to focus more on growing their business and less on regulatory paperwork.

• Minimize the Overall Tax Burden: In an LLP (Limited Liability Partnership), profits are taxed at the LLP level, ensuring that taxation occurs directly within the LLP itself. When these taxed profits are distributed among partners, they are not subjected to further taxation in the hands of the partners. This stands in stark contrast to companies, where distributed profits among shareholders are taxed again. This taxation framework makes LLPs advantageous from a tax perspective, offering a streamlined and efficient taxation process compared to traditional companies.

Steps to Register an LLP (Limited Liability Partnership) in India

• Digital Signature Certificate (DSC): Obtain DSCs for the proposed partners, as these are required for digital filings.

• Name Approval: Select a unique name for your LLP and get it approved by the Ministry of Corporate Affairs (MCA) by filling web form LLP-RUN.

• Document Submission: Prepare and submit the Partnership deed along with other necessary documents.

• Filing with RoC: File the web form partnership deed or LLP Agreement and KYC documents with the Registrar of Companies (RoC).

• Certificate of Incorporation: Upon approval, receive the Certificate of Incorporation, which confirms the registration of your LLP.

• Obtain PAN/TAN: Under the latest regulations, Limited Liability Partnerships (LLPs) can expedite the process of obtaining a Permanent Account Number (PAN) by securing it during the incorporation phase, eliminating the need for a separate application. Entrepreneurs can now apply for PAN concurrently while completing the simplified incorporation form for LLPs, known as 'FiLLiP,' as notified by the Ministry of Corporate Affairs.

Required Documents to Register an LLP in India

• PAN Card of Proposed Partners
• Identity proof (Either Passport, Aadhar card, Driving License or Voter ID) of Proposed Partners
• Colored Passport size photo of Proposed Partners
• Residential Proof (Either Electricity Bill, Telephone Bill or bank passbook) of Proposed Partners
• Proof of registered office (Either Rent/Lease agreement or NOC from owner along with electricity bill) of proposed LLP

Difference Between Partnership Firm and LLP in India

Why Choose E-Accountax Manager for Registering an LLP?

• Expertise: E-Accountax Manager has a team of experienced professionals well-versed in LLP incorporation procedures, ensuring a smooth and hassle-free process.

• Customized Solutions: They offer tailored solutions to meet your specific needs, considering factors like business goals, structure, and compliance requirements.

• Efficiency: With E-Accountax Manager, you can expect prompt service and efficient handling of all documentation and filing processes, saving you time and effort.

• Compliance Assurance: They ensure adherence to all legal formalities and compliance requirements, minimizing the risk of errors or delays in the incorporation process.

• Transparency: E-Accountax Manager maintains transparency throughout the process, providing clear communication and upfront pricing with no hidden fees.