Limited Liability Partnership
Limited Liability Partnership has been introduced in India by way of Limited Liability Partnership Act, 2008. The basic premise behind the introduction of Limited Liability Partnership (LLP) is to provide a form of business organization that is simple to maintain while at the same time providing limited liability to the owners. A Limited Liability Partnership combines the advantage of both the Company and Partnership into a single form of organization and one partner is not responsible or liable for another partner's misconduct or negligence. Therefore, all partners have a form of limited liability for each individual's protection within the partnership, similar to that of the shareholders of a corporation. However, unlike corporate shareholders, the partners have the right to manage the business directly. An LLP also limits the personal liability of a partner for the errors, omissions, incompetence, or negligence of the LLP's employees or other agents. LLP is one of the easiest form of business to incorporate and manage.
Eligibility Criteria for LLP Registration Online
Before learning about the LLP incorporation procedure, it’s essential to know whether your business qualifies for it or not. Eligibility for registering an LLP depends on several factors as per the Limited Liability Partnership Act, 2008.
1. Minimum partners - At least two partners are required to form an LLP (individuals or bodies corporate).
2. Designated Partners -Minimum two designated partners who are individuals, with at least one being a resident of India.
3. Residency Requirement - At least one designated partner must have resided in India for at least 182 days during the preceding year.
4. Age requirement - All partners and designated partners must be at least 18 years of age.
5. No maximum limit - There is no maximum limit on the number of partners in an LLP.
6. Digital Signature Certificate (DSC) - All designated partners must possess a valid DSC.
7. Director Identification Number (DIN) -All designated partners must have a valid DIN or DPIN.
8. Prohibited sectors - LLPs cannot be registered for non-profit activities or in sectors prohibited by the government.
ADVANTAGES OF LIMITED LIABILITY PARTNERSHIP
Documents for LLP Registration
LLP Registration Procedure
Fees
& Penalties of LLP Registration in India
Registration
Costs
1.Name Reservation Fee: Rs. 200 for filing the RUN-LLP form.
2.Incorporation Fee:
Rs. 500 for LLPs with capital contribution up to Rs. 1 lakh
Rs. 2,000 for contributions between Rs. 1 lakh to Rs. 5 lakhs
Rs. 4,000 for contributions between Rs. 5 lakhs to Rs. 10 lakhs
Rs. 5,000 for contributions above Rs. 10 lakhs
3.Digital Signature Certificate: Rs. 1,000 - Rs. 3,000 per designated partner, depending on
validation level and provider.
4.DIN/DPIN Application: Rs. 500 per designated partner.
5.Professional Services: Rs. 6,000 - Rs. 15,000 for complete LLP registration
assistance.
6.LLP Agreement Drafting: Rs. 3,000 - Rs. 10,000 depending on complexity and
customization requirements.
7.Stamp Duty for LLP Registration: Varies by state, typically ranging from 0.1% to 1% of the
capital contribution.
Registration costs
for LLPs vary based on the capital contribution and professional services
required for accurate submission.
Note: The fees mentioned above don’t cover the charges an LLP
registration consultant might take for their services.
Penalties
and Charges for LLP Registration
1.Late Filing of LLP Agreement (Form 3): Rs.100 per day up to a maximum of Rs.5,000.
2.Delayed Annual Returns (Form 11): Rs100 per day for the period of delay.
3.Late Filing of Statement of Accounts (Form 8): Rs.100 per day for the period of delay.
4.Non-Compliance with Various Provisions: Penalties ranging from Rs.1,000 to Rs.5 lakhs, depending
on the nature of the violation.
5.Operating without Registration: Can result in personal liability for all partners and
potential legal actions.
6.False Statements in Documents: Penalties up to Rs.5 lakhs and potential criminal
proceedings.
7.Non-Disclosure of Interest by Partners: Fine up to Rs.1 lakh for the LLP and the concerned
partner.
8.Conducting Prohibited Business: Cancellation of registration and penalties up to Rs.5
lakhs.
Penalties and
consequences for incorrect or delayed LLP registrations and compliance can
include fines, interest charges, and legal action, depending on the severity of
the issue.
How Much Time Does It Take to Register an LLP?
Registering an LLP usually takes around 10 to 15 working days, depending on how quickly you submit documents, how soon the name is approved, and how efficiently the government processes the application.
With professional assistance, the timeline can often be reduced through error-free and streamlined submission.
Key Timeline Breakdown:
- Day 1–2: Apply for Digital Signature Certificates (DSC)
- Day 3–5: Name reservation via RUN-LLP (Reserve Unique Name)
- Day 6–10: Filing incorporation forms with MCA (FiLLiP form)
- Day 11–15: Certificate of Incorporation issued, LLP is officially registered
LLP Incorporation Certificate
An LLP Incorporation Certificate is the official document issued by the MCA that confirms the successful registration of a Limited Liability Partnership. proves the LLP’s legal existence, granting it a separate identity to operate, open a bank account, enter into contracts, and more. The certificate is essential for all legal, financial, and compliance-related activities and should be securely stored.
With the MCA’s online system, obtaining this certificate is quick and convenient, and it can be downloaded easily using your registration details after approval.