What is a limited liability partnership?
Limited liability partnership is popularly known as LLP. It came into existence in the year 2008 & it runs under limited liability partnership act of the year 2008. This act is similar to the partnership firm registration. The fees for LLP registration might differ from place to place and from different CA firms as well. Different firms fix their registration fees for LLP by the commission system they are following.
The legal structure provides no limited liability under general partnership registration which is why limited liability partnership was introduced. LLP can have different terms and conditions in different countries. In a limited partnership firm, only one member partner might require unlimited liability while the rest of the partners at the firm can have limited liability. This is why LLP is more beneficial for the firms where all investors wish to have active participation in the day to day management of the business.
The major characteristics of limited liability partnership are–
- Limited liability partnership is a separate legal entity in the eyes of law. Limited liability partnership and partners are a different entity from each other. It is similar to an organisation where the directors are separate from its company.
- To establish a limited liability partnership, you need to have at least two partners at the initial stage. There can be any number of partners in limited liability partnership as there is no maximum limit on it.
- There is no minimum capital requirement to start a limited liability partnership.
What are the documents required to register a limited liability partnership?
The documents required by the partners or shareholders of a limited liability partnership are as follows –
- Aadhar card or passport or driving license of all partners
- Pan card of all partners
- Utility bill or mobile bill or bank statement (as address proof of partners)
- Photographs of the partners
- Approved DSC
- Limited liability partnership agreement executed amongst the partners.
Documents required to register the address are as follows –
- Rent agreement or NOC from the premises owner (if any). Even though a partner of the proposed limited liability partnership is the owner of the premises, still NOC is compulsory from them.
- Utility bill or electricity bill of the planned registered address.
How to register a limited liability partnership?
The LLP registration process is as follows–
# Step One – Apply for Digital Signature: A Digital Signature Certificate (DSC) is necessary to submit and sign the form online. It helps you to upload annual returns and the IT returns for a limited liability partnership firm. It is saved in a pen drive and is applied for the designed partners of the firm.
# Step Two – Reserve your unique name for the Firm: The second step is to reserve a unique name for your limited liability partnership firm. The name has to be divided into three parts –
- First – Prefix
- Second – Activity
- Third – Limited Liability Partnership
Ensure that the name you have opt for must be unique and must not be similar to an existing trademark, company name or an LLP firm name.
# Step Three – Fill up the Application: In the application form the partners are required to submit office address proof, utility bills of planned registered address, KYC documents & NOC of the premises owner. Along with this, the agreement of the limited liability partnership must be prepared and registered. It is a completely online procedure and it takes about ten to fifteen days to be completed.
Fees for LLP registration
Different CA firms or professional may charge you differently as per their work experience, professional fees and packages. Generally, a package will cover the following services – government fees, digital signature certificate for partners, professional fees, agreement registration and name approval. These packages start from Rs 7,000
onwards. In these charges, you can register your LLP company.
LLP registration fees –
- Director partner identification number or DIN – It will cost you approx. Rs 1000 for two partners which is valid for a lifetime.
- Digital Sign or DSC – Cost will be approx. Rs 2000 for two partners.
- Name Reservation – You may require to pay a fee of Rs 500 approx to reserve your unique proposed name.
- Stamp Duty – Rs 750 approx.
- LLP partner consent preparation will cost you approx. Rs 250.
- LLP agreement preparation will cost approx. Rs 250.
- Total Government fee and charges will cost approx. Rs 4750 to Rs 5000 for the above-mentioned services, plus professional fee may vary from Rs 1500 to Rs 2000.