The word LLP holds immense significance in the corporate world and refers to Limited Liability Partnership which differs from Private Limited Company and General Partnership in terms of liability, protection and cost.
Limited Liability Partnership is a type of partnership firm which is more preferred by entrepreneur. It is the easiest form of business structure with the benefit of limited liability. LLP registration gives freedom to partners to form a partnership structure where the liability of each partner is limited to the amount they contribute into the business. Limited liability partnership firm registration means that if the partnership fails, creditors cannot ask for partner’s personal property or income. LLPs or Limited Liability Partnership is a type of business structure which offers extra benefits in comparison to partnership firm. It provides limited liability to its partners at a very nominal compliance costs. Moreover, the Partners of the firm can organize their internal structure like a partnership firm.
As per Section 3 of the Limited Liability Partnership Act, 2008, under LLP registration a f firm is a corporate body which has come into force with effect from April 1, 2009. The Indian Partnership Act 1932 is not applicable to LLP.
A Limited Liability Partnership firm has a benefit of perpetual succession and can continue its existence even after the retirement, death, insanity of one or more respective partners in the firm.
The most important feature of LLP is limited liability that all its partners entertain which means their personal assets are safe and won’t be used to pay the losses or debt of the firm. Apart from it, innocent partners of a Limited Liability Partnership firm are not liable to pay for the wrong deeds done by some other partner.
A person can start an LLP firm with just two partners out of which one should be an Indian resident. The designated partners limited liability partnership firm can either be an individual or a corporate body. Moreover, there is no specific capital requirement to incorporate a limited liability partnership firm registration.
An agreement is printed on a stamp paper and signed by all the partners that define their roles and duties in the firm. It helps them in the decision making process.
Profit is equally shared amongst all the partners of a limited liability partnership firm. An LLP registration cannot be incorporated for a charitable purpose. Its purpose is to carry on business activities with an aim to earn profit.
The name should not resemble to any of the existing entities and shall not contain any offensive words detrimental to the interest of the society at large. Also, the name should necessary align with the objects of the company and must contain the word “Private Limited”.
A minimum number of 2 members are needed to run a Private Company, out of which 2 members should be the company’s directors. Relatives and Spouse can be directors or members. Maximum numbers of member can be 200 and maximum director can be 15 are allowed in Private Company.
To start a Private Company, a minimum of Rs. 1 lacs is required as equity share capital. Object: The object of the Private company shall be accordingly to business nature and as per the rule and act governed by Law . Any other object in its MOA shall be void.
Since the registration process is online, hence there is the requirement for Digital signatures of all the Directors and Shareholders. We provide two DSCs in our package of Private Company Registration.
Once the name is finalized, the application shall be made in Form SPICE-Part A. The form is a replacement of earlier Form RUN and provides the option to apply for two names.Prepare all requisite documents MOA, AOA, INC 9, INC 10, DIR 2 to be filed with the ROC. These must mention the main objective of incorporating a company.
Obtain an incorporation certificate with the corporate identification number (CIN). It usually takes 5-7 days to form a company..
The MOA is the constitution of the Company and defines various clauses mandatory to bring the company into existence such as Name clause, object clause, registered office clause, liability clause, subscription clause and capital clause.
The Ministry, after being satisfied, that the documents and details submitted in the application are correct and gives a true and fair view of the intentions of the applicant, shall grant the Certificate of Incorporation (COI) along with PAN and TAN.
Within 180 days of incorporation of the Company, a declaration, attested by the Director of the Company, shall be filed with ROC that each subscriber to the memorandum has consented to the share value taken by them.
Soon after the Private Limited comes to the existence, there shall be appointed before the first Annual General meeting of the Company, the statutory auditor who shall hold office till sixth AGM until and unless ratified or a resignation is served.
