LLP was introduced in India with the Limited Liability Partnership Act,2008. It combines the benefits of partnership firm with that of a limited liability company. It is a form of business that is easy to maintain for the owners and limits their liability to the share contributed by them
For LLP registration in India, RK Group Solutions is one of the most cost effective and efficient online platforms.
Requirements for LLP Registration
A business qualifies as an LLP when the following conditions are met:
- At least two partners who are above 18 years of age are required to form an LLP. There is no limit to the maximum number of partners.
- The nomination of an actual person if a body corporate is a partner.
- There is no minimum capital requirement for an LLP. It should have an authorized capital at least Rs.1 lakh.
- At least one Designated Partner is an Indian resident.
- DPIN for all the partners.
- DSC for all the Designated Partners.
- Address proof of the registered office of the LLP. The registered office may not be a commercial space, even a rented home can be the office if an NOC is obtained from the landlord.
- Foreign Direct Investment is allowed in LLP under the automatic route in the sectors allowed by the Foreign Investments Promotion Board (FIPB). There should not be any performance prerequisites that are linked to FDI.
- The LLPs are permitted to opt for downstream investment in a different company or even choose LLP in those sectors which allow 100% FDI in accordance with the automatic route.
Advantages of LLP Registration
- Limited Liability of Partners: Liability of a partner is limited to the capital contributed as per the LLP agreement. Moreover, one partner cannot be held responsible for the misconduct or negligence of another partner.
- Operational Flexibility: Typically, an LLP selects a “Designated Member “ who would control day to day operations of the business. It can have individuals or existing businesses as members. This business structure clearly defines the roles and responsibilities of partners.
- Lesser Compliances: As compared to a Private Limited Company, compliances related to board meetings, statutory meetings do not apply to LLPs. There is no mandatory audit requirement until a certain level of turnover or contribution.
- Separate Legal Entity: LLP is a separate legal entity from the partners. Each partner can sue the other partners if his rights are violated. The existence of an LLP does not depend on the death or cessation of the partners. In order to dissolve an LLP, a term of dissolution has to be mutually agreed upon by the partners.