Limited Liability Partnership

Limited Liability Partnership is a corporate element enrolled under Limited Liability Partnership Act, 2008. It is a type of organization that appreciates limited obligation. It is a cross breed type of an organization that includes the highlights of a company. Compliances for a company are relevant to LLP.

Limited Liability Partnership (LLP) was formed around January 2009, making it a favorite among new businesses and expert administrations. Limited Liability Partnership Registration, administered by LLP Act 2008 joins the advantages of an organization with that of a limited risk company. LLP was introduced to help proprietors by giving them limited risk. The most vital reason for registering as LLP is the limited liability. The members of the firm are only liable for a small amount of debt incurred by it. This is entirely different from proprietorship and partnership where the personal assets of directors and partners are not protected if the business becomes bankrupt. LLPs having a capital amount less than 25 lakhs and turnover below 40 lakhs per year do not require any formal audits. It makes registering as LLP beneficial for small businesses and startups.

Steps to register LLP in India
  • STEP 1: OBTAINING DSC AND DIN
  • STEP 2: APPLICATION FOR NAME APPROVAL
  • STEP 3: LLP AGREEMENT
  • STEP 4: LLP INCORPORATION CERTIFICATE
  • STEP 5: APPLY FOR PAN & TAN & BANK ACCOUNT
FAQ

Yes, non-resident Indians and foreign nationals who are willing to enter into an LLP partnership can do so, provided they submit the necessary documents after getting it notarized by the concerned authorities. Although, at least one of the designated partners in an LLP should be an Indian national.

According to the LLP Act, a minimum of two designated partners are required to start an LLP. The designated partners are responsible for fulfilling all the essential requirements involved in starting and running an LLP.

Yes, it is much cheaper to run an LLP than a private limited company, particularly in your early start-up days. This is because many compliances, such as an audit, apply to LLPs only after their turnover is sizeable. Most LLPs spend about half as much as a private limited company in their first year on registrations and compliance work.