Limited Liability Partnership (LLP) was introduced in India by way of the Limited Liability Partnership Act, 2008. The basic premise behind the introduction of Limited Liability Partnership (LLP) is to provide a form of business entity that is simple to maintain while providing limited liability to the owners. Since, its introduction in 2010, LLPs have been well received with over 1 lakhs registrations so far until September, 2014.
A Limited Liability Partnership Firm is a better version of general partnership firm carrying additional advantageous features like protection of business name, partners having limited liability shield, business listing on registrar of companies, recognition under Startup India – Standup India scheme etc. LLP represents the business legal entity more professionally among your buyer personas as compare to normal partnership firm.
For registration of LLP in India, the DSC (Digital Signature Certificate) and DIN (Director identification Number) of all the Designated Partners are to be acquired. The Registered Office shall also be in existence for LLP formation in India
Digital Signature Certificate is provided in a token form and issued by Certified Authorities. Any form filed for incorporation of Limited Liability Partnership (LLP) online shall be submitted after affixing the DSC of an Applicant. Also, the directors will require DSC for DIN application and the subscribers to MOA shall possess DSC for submitting e-forms.
Director Identification Number is a unique number assigned by the Ministry of Corporate Affairs to Individuals on application made, which allows any individual to be Director in any Company or Designated Partner in LLP. Further, the concept of DPIN (Designated Partner Identification Number) does not persist any more with respect to incorporation of LLP.
A Limited Liability Partnership can be started with any amount of capital contribution by the Partners as there is no minimum requirement prescribed in this regard. The Partners can contribute in any amount agreed and in any form being tangible (cash, premise) or intangible (goodwill, intellectual property). The amount of cash agreed to be contributed is required to be deposited in the account of LLP after incorporation and not later than 1 year. Further, capital mentioned while name application cannot be changed till filing of LLP agreement.
To incorporate a Limited Liability Partnership in India, at least 2 Designated Partners shall be appointed where both are individuals and at least one being resident in India.
Yes, a body corporate can be a Partner in an LLP. However, to fulfil the requirement of minimum Designated Partner, any of the\ two Partners or the nominee of the Body Corporate shall act as Designated Partner in the LLP.
There are no limitations in terms of citizenship or residency to be a Partner. Therefore, the LLP Act, 2008 allows Foreign Nationals including Foreign Companies & LLPs to incorporate a LLP in India provided at least one Designated Partner is resident of India. However, the person should be 18 or above i.e. not a minor and competent to enter into contract. Also, the proposed Designated Partner shall have DIN (as explained above).
One or more activities can be carried on under on roof of LLP, however these activities must be related to and of near industry. Diversified activities cannot be carried on under same LLP. The activities of the LLP shall be added in the LLP Agreement after LLP incorporation. The activities to be added in LLP Agreement shall be in accordance with the description given while Name Application.
The LLP agreement shall be mention the activities to be carried on by the LLP in detail, the capital contribution and profit sharing ratio of the partners. Further, the LLP agreement shall be filed within 30 days from the date of LLP incorporation after payment of stamp duty to the respective Government.
While online LLP Registration, the stamp duty on the Agreement according to the capital contribution of the Partners in the LLP. The rate of Stamp Duty varies based on State where the Registered Office of the LLP is situated. Further the Notary on the Agreement is not statutory requirement and not required by the MCA. Notary can be required by the bank officials but is not mandatory for incorporation of an LLP.