GST Suvidha Centers
GST Suvidha Centers gives a hassle-free and complete LLP accounting and compliance management solution.
Limited Liability Partnership
Limited Liability Partnership is a legal entity registered with the Registrar of Companies under the Limited Liability Partnership Act, 2008. This entity is regulated by the Ministry of Corporate Affairs. It is a combination of a Partnership firm and a company. LLP is a partnership but it enjoys almost all the features of the company, and these are:
Separate Legal Entity : The LLP has a separate and distinct entity from its partners as the company has from its shareholders. The partners and LLP are different from each other, the identity of the LLP doesn’t get affected by the change of the partners.
Limited Liabilities : All the partners of the LLP are having limited liabilities whereas in the partnership firm all the partners having unlimited The partners are not personally liable for any debt or loss incurred by the LLP. They are only responsible for such amount which they agree to contribute as mentioned in the LLP agreement.
On Its Name : The LLP can buy or sell the property on its name and also sue or be sued by any person on its name and also get entered into any contract or agreement with any other person under its name.
Benifits
After settling on your business model, it's necessary to decide between the Private limited company registration and LLP, by understanding their diversity and benefits they give, to decide what’s best for your company model.
The most vital purpose for listing as LLP is limited accountability. The members of the firm are only responsible for a small number of shares incurred by it. This is completely different from proprietorship and partnership where the individual assets of directors and partners are not preserved if the business becomes bankrupt.
Separate Legal Entity
LLP is a separate legal entity from the co-workers. Each associate can sue the other in case a situation occurs. It has an unbroken existence that follows regular succession, i.e., the partners might leave, but the company remains. A term of resolution has to be mutually agreed on for the firm to dissolve.
Flexible Agreement
Transferring the title of LLP is also simple. A person can quickly be inducted in as a nominated partner and the ownership switches to them.
Suitable For Small Business
LLPs having a capital amount of fewer than 25 lakhs and turnover below 40 lakhs per year do not need any formal audits. It makes the listing as LLP useful for small companies and startups.
An LLP can own or take property because it is identified as a juristic person. Associates of LLP cannot claim the property as theirs.
No Owner / Manager Distinction
An LLP has associates, who own and operate the business. This is different from a private limited company, whose executives may be different from stockholders. For this reason, VCs do not invest in the LLP structure.
Documents required for LLP registration in India
The method of LLP registration in India does not require much legwork when it comes to documents.
To Be Submitted By Partners
Scanned copy of PAN Card or passport
Scanned copy of Adhar Card/ Voter's ID/Passport/Driver's License
Scanned copy of Latest Bank Statement/ Mobile Bill/Electricity or Gas Bill
Scanned passport-sized photograph Specimen signature (blank document with signature [partners only])
Note : Any one of the partners must self-attest the first three documents. In the case of foreign nationals and NRIs, all the documents must be notarized (if currently in India or a non-Commonwealth country) or apostilled (if in a Commonwealth country).
For The Registered Office
Scanned copy of latest bank statement/telephone or mobile bill/electricity or gas Bill
Scanned copy of Notarised Rental Agreement in English
Scanned copy of No-objection Certificate from the property owner
Scanned copy of Sale Deed/Property Deed in English (in case of owned property)
Note : Your registered office need not be a commercial space; it can be your residence, too.
Check if your firm qualifies for LLP in India
Starting a business requires certain specific conditions to be satisfied to be prepared for registering as an LLP.
The normal partnership structure and LLP share the same characteristics when it comes to organic administration, profit distribution, and tax obligations. But, it offers the partners less financial liability (limited liability).
Any business who has :
At least two partners are required to form an LLP. There is no limit to the maximum number of partners
The nomination of a natural person, if a body corporate is a Partner
No shared capital requirement, though each partner must have an agreed contribution towards it.
Minimum capital contribution: There is no minimum capital requirement for an LLP (or a company, for that matter). The LLP should have an authorized capital of at least Rs. 1 lakh.
At least one Designated Partner as an Indian resident
DPIN for all Partners
DSC for all the Designated Partners
Address proof for the office of LLP. The registered office of an LLP does not have to be a commercial space. Even a rented home can be the registered office, so long as a NOC is obtained from the landlord.
Concerning the changes in the FDI regulations dated November 10, 2015, foreign investors are now permitted to have a 100% FDI in the automatic route LLP. The 100% FDI in the LLP is granted to foreign companies who operate in activities or sectors where 100% FDI is considered permissible through the channels of the automatic route. Also, there should not be any performance prerequisites that are linked to FDI. A definite interpretation of the terms such as ‘internal accruals’ and ‘ownership and control’ has been provided concerning the LLP. Thus, Foreign investment is made smoother and quicker with FDI in LLP.
The LLPs will also be permitted to opt for downstream investment in a different company or even choose LLP in those sectors which allow 100% FDI following the automatic route. This does not come up with any performance constraints that are FDI linked.
