A Limited Liability Partnership(LLP) is a different legal entity which combines the best of both the worlds of Sole Proprietorship and Private Limited entity in a sense that it reduces the liability on the single owner and the company can most definitely have multiple owners. Apart from this, compliance laws are a little bit relaxed as compared to the Private Limited Company.
To begin a Limited Liability Partnership, least two accomplices are required which would, thusly, be the assigned accomplices (ought to be two in number) and it is compulsory that one of them ought to be an occupant of India.
It is much better than other legal forms of entities because of the more flexibility it provides. There is no most extreme top for the number of accomplices in a constrained obligation association. It is perfect for an independent company as it is easy to keep up, financially savvy, and involves restricted obligation upon the accomplices.
This implies not at all like different types of organization consolidation, in a constrained obligation association the accomplices are not mutually at risk for the careless demonstrations of another accomplice; the risk is restricted to the degree of the capital commitment of the accomplice.
LLP additionally has other money saving advantages like no base capital prerequisite, bring down consistency costs, tax breaks, and a simple consolidation system which make it an extremely lucrative choice. In any case, a Limited Liability Partnership because of the innate nature isn’t permitted to issue value offers and in this manner can’t fund-raise from the Publics, and can’t offer comparable advantages like ESOPs to the representatives.
Advantages of LLP Registration
1. Low cost of Formation
The expense of development is low when contrasted with some other type of business. Likewise, the compliances are much lower than different types of business.
2. Separate Legal Existence
LLP has a different Legal presence which is not quite the same as its proprietor.
3. Perpetual Succession
As it is a joined substance, it has never-ending progression. The LLP is a fake substance particular from its proprietor.
4. Limited Liability
While working together as a proprietorship firm, the individual resources of the proprietor can be in danger in case of disappointment, yet this isn’t the situation for a Limited Liability Partnership, as the investor risk is constrained to his shareholding. This implies any misfortune or obligations which is simply of business nature won’t affect, individual investment funds or abundance of a business visionary.
The process of getting LLP
Step 1: Digital Signature Certificate (DSC)
Before you start the process of registration, you must apply for the digital signature of all the partners for the LLP registration. Since all the documents for LLP have to be filled online, a digital signature is required to get them signed.
So, the potential partners must obtain their digital signature certificates from government recognized certifying agencies.
Or you can click here & let a LegalSalah expert procure DIN for you.
Step 2: Director Identification Number (DIN)
After getting the Digital Signature Certificate, You have to apply for the Director Identification (DIN) of all the designated or potentially designated partners.
Form DIR-3 has to be submitted to apply for the allotment of DIN. The scanned copy of your Aadhar is required to be attached to your form which must be signed by either an advocate or a Charted Accountant.
Step 3: Reservation of Name
The reservation of the name of the LLP is done by filling the Form 1. You can use the free name search facility on MCA portal to know if a company exist similar to the name you want for your proposed LLP.
The name will be approved if the name is considered ok in the opinion of the registrar and is in keeping with the guidelines of the Central Government.
Step 4: Incorporation of LLP
For the incorporation of the LLP, you must fill Form 2. The form has to be duly signed by all the designated partners having DIN and advocate/Company Secretary.
The time required for LLP registration is around 15-20 days in accordance with the government processing time.
Step 5: File Limited Liability Partnership Agreement
LLP agreement clearly states the mutual rights and duties of each partner respectively. Form 3 has to be filled on MCA Portal for registering for LLP Agreement. Filing of Form 3 should not be delayed for more than 30 days from the date of incorporation.
legalopinion 