LLP Company Registration
LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership
Benefits of Private Limited Company
- No requirement of minimum contribution
- No limit on owners of the business
- Lower registration cost
- No requirement of compulsory Audit
- Taxation Aspect on LLP
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What is LLP?
■ LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership
■ The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
■ The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP
■ The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP
■ Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct
■ Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.
Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.
Advantage of LLP
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No requirement of minimum contribution
No requirement of minimum contribution
There is no minimum capital requirement in LLP. An LLP can be formed with the least possible capital. Moreover, the contribution of a partner can consist of tangible, movable or immovable or intangible property or other benefits to the LLP -
No limit on owners of the business
An LLP requires a minimum of 2 partners while there is no limit on the maximum number of partners. This is in contrast to a private limited company wherein there is a restriction of not having more than 200 members
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Lower registration cost
The cost of registering LLP is low as compared to the cost of incorporating a private limited or a public limited company. However, the difference in the cost of registering an LLP vs Private Limited Company has come down in recent days. For example, an LLP can be registered through IndiaFiling for Rs.7899. A company can also be registered through IndiaFilings for Rs.7899
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No requirement of compulsory Audit
All companies, whether private or public, irrespective of their share capital, are required to get their accounts audited. But in case of LLP, there is no such mandatory requirement. This is perceived to be a significant compliance benefit. A Limited Liability Partnership is required to get the tax audit done only in the case that
-The contributions of the LLP exceeds Rs. 25 Lakhs, or
-The annual turnover of the LLP exceeds Rs. 40 Lakhs -
Taxation Aspect on LLP
For income tax purpose, LLP is treated on a par with partnership firms. Thus, LLP is liable for payment of income tax and share of its partners in LLP is not liable to tax. Thus no dividend distribution tax is payable. Provision of ‘deemed dividend’ under income tax law, is not applicable to LLP. Section 40(b): Interest to partners, any payment of salary, bonus, commission or remuneration allowed as deduction
Documents Required for Online Company Registration
- PAN Card of the Partners
- Address Proof of the Partners
- Utility Bill of the proposed Registered Office of the LLP
- No-Objection Certificate from the Landlord
- Rental Agreement Copy between the LLP and the Landlord
ROC Compliance for LLP
| S.No. | Particulars | Details |
|---|---|---|
| 1 | Form-3 | Filing of LLP Agreement within 30 days from incorporation of LLP |
| 2 | Form -11 | Each LLP needed to file the Annual Return within a span of 60 days after closing the books of accounts |
| 3 | Form-8 | Filing Statements of Accounts on or before 30th October annually |
| 4 | DIR-3 KYC | Designated Partner/Partner are required to file form DIR-3 KYC before 30th September every year |
