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 one lakhs registrations in India.
LLP is one of the easiest types of business to incorporate and manage in India. With an easy incorporation process
and simple compliance formalities, LLPs are preferred by Professionals, Micro and Small businesses that are
family-owned or closely-held. Since LLPs are not capable of issuing equity shares, LLP should NOT be chosen
for any business that has plans for raising equity funds from Angel Investors, Venture Capitalist or Private Equity Funds.
Private limited company registration process and the LLP registration process are very similar with some differences in the documents and forms filed for incorporation.
The cost for the incorporation of a private limited company or an LLP is the same.
Both LLP and Private Limited Company offer many of the same features. LLP and Private Limited Company are both separate legal entities and have assets and liabilities that are separate from that of the promoters. LLP and Private Limited Company are both transferable, though a Private Limited Company offers more flexibility when it comes to transferring or sharing of ownership. LLP and Private Limited Company both have perennial life, unless and otherwise closed by the promoters or competent authority.
A private limited company can raise funds from Angel Investors, Private Equity Funds, Venture Capitalists, banks and NBFCs. An LLP can raise funds from Partners, Banks and NBFCs.
Post changes to FDI regulations on 10th, November 2015, 100% FDI in LLP is permitted under the automatic route. In most sectors, 100% FDI in LLP is allowed through the automatic route, and there are no FDI-linked performance conditions. In addition, LLPs will also be permitted to make downstream investment in another company or LLP in sectors in which 100% FDI is allowed under the automatic route. Therefore, FDI in LLP is now permitted, and NRIs or Foreign Nationals can start or invest in an LLP.
The following are the documents required for registration of LLP in India:
1. PAN Card or Passport for Foreigners.
2. Drivers license or Aadhar card, residence card or election identity card or any other identity proof issued by the Government.
3. Less than 3 months old bank statement or telephone bill.
1. The authorization from the Landlord (Name mentioned in the Electricity Bill or Gas Bill or Water Bill or Property Tax Receipt or Sale Deed)
to use the premises by the company as its registered office. This is usually referred to as NOC from Landlord; AND
2. Proof of evidence of any utility service like telephone, gas, electricity, etc. depicting the address of the premises in the
name of the owner or document, which is not older than two months.
The average time taken to complete an LLP registration is about 15 - 20 working days,
subject to government processing time and client document submission.
At the start of the engagement, your Engagement Manager will reach out to you for the collection of the necessary
information or documents for registration of LLP. The data can be submitted online through our mobile app or website.
Once the information is received, it is verified by the Engagement Manager,
the process for obtaining Digital Signatures for the Partners of the LLP would be initiated.
On submission of the digital signature application, the applicant would have to complete
OTP verification and a video KYC check. In parallel to the digital
signature application process, we also file a request with the MCA for reserving the name of the LLP - you had selected.
On obtaining the name approval and the digital signatures, we would draft all the incorporation documents for the registration
of the LLP and sent it to the Partners for signature.
All of the Partners must sign the document and upload a scanned copy of the signed document on the Ex-legal Solution platform.
Ex-legal Solution can help you maintain the basic accounting and compliance for your LLP - at a very affordable price point.
Our LLP accounting and compliance packages start from Rs.7899 per year. The following are compliances that a LLP must complete each year.
LLPs must file income tax return using Form ITR 5. Form ITR 5 can be filed online through the income tax website using the digital signature of the designated partner.
LLP Form 11 is due on or before 30th of May each year. Form 11 contains details of the number of partners, total number of partners, total contribution received by all partners, details of body corporate as partners and summary of partners.In addition to LLP Form 11, Form 8 must be filed within 30 days from the end of 6 months of the financial year along with some prescribed fee. Hence, LLP Form 8 would be due on or before 30th October of each financial year.
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