Limited Liability Partnership (LLP) is an alternative corporate business form that gives benefits of limited liability of a company and flexibility of a partnership. The LLP is a separate legal entity and is liable to the full extent of its assets but the liability of the partners is limited to their agreed contribution in the LLP. 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. 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. The governance structure of a Limited Liability Partnership is flexible somewhat similar to any other partnership firm since they are governed by contractual agreement between parties.
Minimum requirements for the formation of LLP are:
1) At least two partners (designated partners), either a natural person or any other legal entity, at least one should be resident in India.
2) A registered office in India.
- Check availability of the proposed name and select up to six names in order of preference.
- Once the proposed name is approved or is available, apply for LLP registration within 90 days of the name approval.
- Digital Signature Certificate (DSC) will be required for form submission; it is advisable to obtain DSC, if not available.
- Designated Partner Identification Number (DPIN) is mandatory for all Partners; it is advisable to obtain DPIN, if a designated partner does not have one.
- PAN card acts as a primary ID proof.
- Residence Proof of Partners
- Proof of Registered Office Address
- NOC from the landlord in case of rented office
- Passport size photograph
- Passport (in case of Foreign Nationals/ NRIs)
- Proof of address for NRIs
- LLP Agreement within 30 days of LLP Incorporation.
1. What is LLP agreement?
LLP Agreement is an agreement executed by all partners after LLP incorporation in India. The agreement prescribes all the clauses related to business, including the rights, roles, duties, and responsibilities of partners in LLP. The agreement must be filed within 30 days of the issue of a certificate of incorporation. Failure to do so will charge an additional fee of Rs. 100 per day till the date of filing.
2. How is the stamp duty amount decided for LLP agreement?
The amount of capital contribution is taken into consideration in deciding the stamp duty on the LLP Agreement in India. The rate of stamp duty varies from State to State. The State Stamp Act will be applied depending on where the registered office is situated.
3. Can an LLP carry on multiple business activities?
Yes, a Limited Liability Partnership registered in India can carry on more than one business subject to their relevancy. The activities must be related or in the same field itself. Unrelated activities such as Interior Designing and Legal consultancy cannot be carried under the same LLP. The business activities are mentioned in the agreement and must be approved from RoC.
4. Can you register LLP at your home address?
Yes. An LLP can be registered at your home address.
5. What is LLP Annual Filing?
LLP Annual filing includes the following components: Annual Return Statement of the Accounts or you can say Financial Statements of the LLP Income Tax Returns Filings.
6. Do I need to be physically present to incorporate an LLP?
No. This process is completely online and physical presence is not needed.
7. How can an existing partner cease to be a partner of an LLP?
A person may cease to be a partner in accordance with the agreement or in the absence of agreement, by giving 30 days notice to the other partners. Notice is required to be given to ROC when a person becomes or ceases to be a partner or for any change in partners.
8. Whether the Registrar has any power to call for information from LLPs?
Registrar would have power to obtain such information which he may consider necessary for the purposes of carrying out the provisions of the Act, from any designated partner, partner or employee of the LLP. He would also have the power to summon any designated partner, partner or employee of an LLP before him for any such purpose, in case the information has not been furnished to him or in case the Registrar is not satisfied with the information furnished to him. Any person who, without lawful excuse, fails to comply with any summons or requisition of the Registrar under this section shall be punishable with fine which shall not be less than two thousand rupees but which may extend to twenty-five thousand rupees.
9. Is there a requirement to file an Annual Return by an LLP?
Every LLP is required to file Annual Return with ROC. A duly authenticated Annual Return in e- Form-11, is to be filed with the Registrar, together with the prescribed fee, within a period of 60 days from the closure of every financial year.
10. How can a person become a partner of an LLP?
Persons, who subscribed to the “Incorporation Document” at the time of incorporation of LLP shall be partners of LLP. Subsequent to incorporation, new partners can be admitted in the LLP as per conditions and requirements of LLP Agreement.