Simple and effective ways to register LLP online
What is LLP?
Limited liability partnership or LLP is a form of partnership which was enacted in the Limited Liability Partnership Act, 2008 in India. The main reason to sanction LLP was to administer the business entity smoothly while providing the owners with limited liability. In such a partnership, no partner can be held guilty for another partner's non-chalance. LLP registration online has been widely accepted by people since 2008.
Simple features of the Limited Liability Partnership
- An LLP is an entirely separate legal constituent, recognized under the LLP Act 2008. Additionally, LLP is mainly a low cost of the bargain with zero capital constrictions.
- The legal professional’s fees are less as compared to the privately owned company along with the government charges which are also negligible.
- Limited Liability the LLP guarantees the safety of personal assets of partners and the liability of LLP is basically limited to the assets of LLP firm only.
- No audit is required when it comes to registering for LLP. Only in the case of a turnover higher than Rs. 1 crore, LLP’s accounts need to be audited. LLP contributes immensely when it comes to tax matters.
- An LLP authorizes for "pass through" taxation. Thus, the profits and/or losses are redirected to the partner's tax return. As a result, those partners benefit who have an extensive or inadequate interest in that particular company. Besides, loan to partners is not assessable as well. However, when owners of any company withdraw benefits from the company, they are subjected to additional tax. This accountability takes the form of DDT where 15% is to be paid by the company. Whereas, when it comes to Limited liability partnership no such tax is payable, besides profits of an LLP can be uncomplicatedly withdrawn by the partners.
LLP registration procedure
The LLP registration procedure is a corporate body in itself, and any individuals willing to start a business venture may resort to this procedure by registering their names to an incorporation document as well as to the Registrar. This will enable them to develop a Limited Liability Partnership. Moreover, the duties and rights of the partners are protected by the LLP and provide certain flexibility when it comes to devising the agreement. Furthermore, In order to successfully register to LLP online, there should be at least two partners as well as two individuals as Designated Partners. Additionally, one among these two partners should be a resident in India. In case any affairs of LLP need to be investigated, The Central Government has the authority to do so by appointing an Inspector deemed fit for the purpose. The LLP Act 2008 also sanctions merger of LLPs or conversion of a private company, unlisted company or a firm into LLP.
Documents necessary for the Limited Liability Partnership
In India, limited liability partnership registration requires few documents, which are mandatory. The primary documents that are needed are the PAN Card of the partners, address proof of the partners, the Utility Bill as proposed by the registered Office of the LLP, no-objection Certificate provided by the Landlord as well as a rental agreement copy between the LLP and the Landlord. The address proof and the PAN card of the partners registering for LLP are the first documents that are considered necessary to commence. LLP registration procedure : The rest of the pending documents, however, can be presented to the Registered Office of the LLP afterward. This can be done after gaining name approval from the Registrar of Companies for the LLP.
How to register LLP online?
The LLP registration online process is quite a simple process and can be done in a few easy steps.
- The first step involves partners to submit their respective digital signature. Thereafter, in order to obtain Director Identification Number or Designated Partner Identification Number or DIN for the Partners of the LLP, it is necessary is a call for a Digital Signature Certificate (DSC).
- It is possible to obtain the DSC within one day of filing of the DSC Application at the Ministry of Corporate Affairs. However, digital signatures most of the time have a validity of one or two years. The amount charged for obtaining a DIN is Rs. 500/- and to obtain a DSC, the amount ranges from Rs 800-2650/-.
- Following the completion of this procedure, it is required to apply for the name approval for the online LLP registration. The LLP registration fees for obtaining name approval is Rs 500/-.
- The online registration of LLP is validated by the proof which is henceforth provided by the registrar of companies who issues the Certificate of Incorporation which is the proof of the registration. The LLP will be considered registered on successful issuing of the incorporation certificate.
- Thereafter, an application for PAN for the LLP can be submitted. The LLP Partners will then be provided with 30 days time to file the Partnership Deed of the LLP with the MCA. A fine will be applicable if the LLP Partnership Deed is not filed within the duration of 30 days.
- Moreover, a current bank account has to be opened after filing LLP agreements. The Ministry of Corporate Affairs, Companies Master Data website will provide all the company details.
Advantages of limited liability partnership registration
- LLP or Limited liability partnership does not restrict the number of owners that can be involved with the business venture. It does not hold one partner liable for any flawed decision; rather all partners are equally responsible for the incident. This causes a reduced amount of liability for the partners.
- LLP partnership allows tax breaks where each partner is needed to file a variety of different tax forms regarding the business.
- LLP also enable partnerships that are flexible in nature. Irrespective of the agreement, each partner in the business has the authority to decide their involvement in the business. There lies a freedom with the partners and it is their decision if they want to participate in business meetings or conferences.
Disadvantages of a Limited Liability Partnership Registration
- Few states refrain from recognizing LLP as a legal agreement.
- On the contrary, states that do recognize LLP levy large tax limits on limited liability partnerships. These taxes can be charged in the form of - additional taxes as well as personal tax filing.
- Moreover, many consumers and clients view LLP as not credible.