Below guidance helps you to understand the nature of LLP Company and describes the LLP registration process.
Before selecting LLP form of entity, it may be advisable to understand and ensure that it would be appropriate for you business nature. LLP is hybrid between private limited company and a partnership firm. LLP have a structure similar to partnership firm, but also have advantage of Limited Liability Company. LLPs have a lot of the flexibility traditionally associated with general partnerships but also bear some of the maintenance obligations of limited companies. LLP Company has partner rather than shareholders or directors. A partner or designated partner is both an owner of the LLP Company and is entitled to involve and take decision of the company and management. An LLP Company must have at least two partners/ Designated Partners. Designated partners have the same rights and obligations like directors of the company.
LLP is a business entity which was introduced in India recently. The legislation for Limited Liability Partnership was introduced in 2009. LLP Company Registration in India is governed by the Limited Liability Partnership Act. Limited Liability Partnership is a separate legal entity from its partners in comparison to a normal Partnership firm. LLP partners are not responsible for each other’s decisions and Limited Liability Partnership partners cannot lose their investment in the company, unless involved in fraudulent trading or personal neglect is suspected.
LLP registration in India requires at least two partners. Limited Liability Partnership partners can be individuals or corporate entity. Every Indian LLP company must have at least two; formally appointed designated partners at all times and LLP Company designated partners have the same duties and responsibilities towards the LLP, but also extra liabilities. LLP Company designated partners are responsible for filing accounts with Ministry of economy. LLP company registration is not applicable for all type businesses activities but LLP Companies are now a day’s increasing popularity, not just for professional firms, but also for trading and other service activities.
There are several LLP Company advantages that should be kept in mind when deciding on what legal entity is suitable for you. A LLP partner is only taxed on his share of profits generated in a tax year. Another LLP advantage is that LLP partner does not need to hold general meetings and keep records of meetings unlike private limited companies and LLP companies having less compliance and registration charges.
LLP formation is no different from private Limited company registration. In India Ministry of companies provides LLP formation through its online. To form a LLP Company need to provide: Proposed LLP name; registered office address, id proof of the LLP partners and LLP Agreement. LLP Company has the same name guidelines as ltd company. Also have to procure DIN and Digital signature for all the partners of LLP.