By registering as an LLP, business partners may restrict their personal responsibility for the actions of other partners in the company while still enjoying the benefits of working together to increase efficiency and profitability.
The Significance of the LLP Registration Consultant
Partners in a partnership may create a LLP Registration Consultant (LLP) by entering into a binding contract. The purpose of this agreement is to promote a mutually beneficial commercial relationship among the LLP’s members and to protect the rights and interests of all members and the LLP as a whole. While registering a general partnership is not required by law, limited liability partnerships (LLPs) are required to do so and must do so with a properly completed LLP agreement.
Registration Requirements for a Limited Liability Partnership
- The most up-to-date passport-sized photos of each partner’s individual Permanent Account Number (PAN) card.
- Identity documentation for each joint venture participant (aadhar card, passport, driving license or voter ID card).
- Authentication by specimen signature.
- Each and every partner’s address proof (bank statement or passbook, electricity bill, telephone bill, aadhar card or any utility bill).
- Mobile phone bills, utility bills, or bank statements showing current addresses for all partners.
- Electricity bill with rent agreement and NOC / ownership evidence of the intended registered office LLP agreement and stamp paper from the state where the LLP will be formed.
Ask Yourself If Forming An LLP Is The Right Move For You
Forming an LLP is subject to a few minimal requirements. You can only lawfully form an LLP and run it if you meet the following requirements.
- At the very least, two persons are needed to form a limited liability partnership. The maximum number of partners, however, is undefined.
- The amount of capital available to an LLP Registration depends on the requirements of the company and the contributions made by the partners. The Stamp Duty on the deed is calculated based on the amount of capital. An LLP may begin operations with zero initial capital.
- An Indian citizen or permanent resident must be a designated partner in the limited liability company (LLP).
- If an LLP’s annual revenue is above 40 lakh or if the total capital contribution is over 25 lakh, an audit of its financial statements is required.
If you’re certain that your business meets the above minimal requirements for forming an LLP, you may assess the viability of doing so by reading about the benefits of forming an LLP in the next part of this blog.
The Motivation Behind Forming an LLP
Use a company’s operational simplicity and adaptability to your advantage
The main advantage of a limited liability company is the reduced administrative burden and streamlined processes involved in getting one up and running. Although they are similar to corporations in that each member has separate legal personality, the costs associated with forming an LLC are far lower. Due to its adaptable form and administration, the LLP is a useful vehicle for start-ups and venture capital.
Reduce Your Tax and Compliance Efforts
Since there is no need for an annual audit in an LLP, the LLP’s ROC compliance is lower than that of a private limited business. In addition, the company’s compliance with regulations is inadequate in light of its organizational make-up. The dividend tax is not incurred by a limited liability company either.
To shield yourself from legal responsibility, it’s recommended that you establish a legal entity separate from yourself
In a limited liability partnership (LLP), each partner’s financial exposure is capped to the amount they invested in the LLP. In reality, a limited liability partnership (LLP) has its own legal personality and may be sued in its own right, just like any other person or corporation. The LLP will remain in existence even if one of the partners passes away. A transfer of ownership of a limited liability company (LLP) is a simple process; the transferee, however, must be admitted as a designated partner of the LLP. Partners and the LLP may also lend to one another.