Numerous entrepreneurs opt to register a LLP in India as it provides flexibility, limited liability features and simple management. The LLP registration procedure brings together the benefits of a company and a conventional partnership, making it the ideal solution for small to medium sized companies. This article discusses the steps to form an LLP and offers an LLP setup guide for your registration.
Understanding LLP and Its Benefits
First, understand what an LLP is prior to jumping into how to register an LLP. An LLP is a Limited Liability Partnership where the partners have limited liabilities (they aren’t personally responsible for the business’s debts). This format gives the partnership limited liability but the flexibility of a partnership.
Benefits of LLP Registration in India
The benefits of LLP Registration in India are:
- Limited Liability Protection: Partners in an LLP aren’t personally responsible for business debts or other partners ‘negligence.
- Flexibility: Unlike a company, there are no stringent compliance requirements on an LLP and it’s simpler to handle.
- Tax Advantages: LLPs generally have no dividend distribution tax and no income tax on earnings distributed to partners.
LLP Registration Checklist and Requirements
The LLP registration requirements are simple but should be followed for legal operation and compliance. A quick LLP registration checklist includes:
- Designated Partners Identification Number: All designated partners require a DPIN and can get one through the MCA through an application.
- Digital Signature Certificate: A DSC is necessary for every partner mainly for the signing of electronic papers submitted during registration.
- Reserved Unique Name: The proposed LLP must have a name which is different from any existing business entity or trademark.
How to Register an LLP: A Clear Guide
The LLP registration process in India is entirely online. The steps to register a Limited Liability Partnership are detailed below:
Step 1: Obtain DSC and DPIN
The first step in the LLP incorporation procedure is obtaining DPIN for each designated partner. Then get a DSC for all the partners in the LLP. They are necessary for legal verifications and filings throughout the registration process.
Step 2: Name Reservation
Use the RUN-LLP service on the MCA Web site and suggest one or two names for your LLP. Be sure the names are original, non-offensive and not identical to existing companies or LLPs. The name must reflect the business activities and be in line with the MCA naming rules.
Step 3: Fill in the FiLLiP Form
Once the name is approved, complete the Form for incorporation of LLP on the MCA portal. This particular form brings together several declarations and particulars such as names and addresses of partners, contributions and registered office address of the LLP.
Step 4: Send the Required documents
Attach the required documents with the FiLLiP form. These usually include:
- Proof of registered office address (lease or rental agreement & recent utility bill).
- Consent of partners (to be partners of the LLP).
- Subscriber sheet with consent from each partner.
- Details of LLP and / or company in which partner / designated partner is a director / partner (where relevant).
Step 5: Payment of Fees & form Submission
Once complete and all required documents are attached, submit the Form and the proper fee. The fee depends upon the total obligation of contribution in the LLP agreement.
Step 6: Certification of Incorporation
Upon inspection of the files and forms submitted, the registrar issues a Certificate of Incorporation as evidence of the LLP’s formation.
Step 7: File LLP agreement
After incorporation file the LLP agreement via form 3 on the MCA portal within 30 days of incorporation. This agreement identifies the partners ‘mutual rights and duties and their rights and duties with regard to the LLP.
Legal requirements for LLP
Meet all continuous legal requirements (annual filings, books of accounts, and periodic audits if applicable) post-registration to keep your LLP in compliance. Respecting these requirements will ensure legal compliance along with credibility and operational efficacy of the LLP.
Conclusion
The LLP registration procedure in India is very business-friendly and simple. Follow this LLP setup guide to help make sure entrepreneurs meet all legal LLP requirements and determine the basis for their business endeavors. Whether you are moving from a sole proprietorship to starting from scratch, completing and knowing the steps to form an LLP creates new possibilities for your business.
FAQs
What are the minimum requirements to register a Private Limited Company?
Following will be the basic requirements to register a Private Limited Company in India:
- Directors: The company shall have more than 2 directors, among whom should be a resident of India (a resident is an individual that has remained in India for more than 182 days in the prior calendar year).
- Shareholders: At least two shareholders have to be corporations or individuals. The same individuals could be directors or shareholders.
- Registered Office Address: The company needs a physical address of India as its registered office. All official communications will be sent here.
- Unique Name: The proposed company name has to be distinct from any current business or trademark registered in India.
Is there a minimum capital requirement to launch a Private Limited Company?
There’s no minimum capital required to launch a Private Limited Company in India at the moment. This particular change was made to simplify starting a business in India. Nevertheless, the capital structure ought to be able to handle the initial expenditure and operations of the business. The value of shares mentioned at the registration may be as low as the company deems sufficient to start operation.
Can an overseas national become a director in a Private Limited Company?
A foreign person can be a director of a Private Limited Company in India. Nevertheless, more than 1 director shall be a resident of India. The foreign Director requires a DIN and should satisfy all applicable regulatory requirements like an Indian Director. This includes acquiring a digital signature certificate and being entered on the company’s documents.
How StartupFino can help with Company Registration?
StartupFino can assist with the registration of a Private Limited Company including:
- Consultation and Planning: Advising on the very best business structure for you and assisting with strategic planning for registration and beyond.
- Documentation & Filing: Assisting with preparation and filing of documents required for company registration. This includes acquiring DINs, electronic signatures and drafting the Articles of Association & Memorandum of Association.
- Name Approval and Registration: Helping with name approval process and filing the registration forms together with the Registrar of Companies.
- Post Registration Compliance: Support with post-registration obligations like tax compliance and filing annual returns.
- Additional Services: We offer extra business setup services like GST registration, trademark registration and opening of bank accounts to brand new entrepreneurs.
StartupFino handles all the legalities so can simply concentrate on various other important matters while launching your business.
