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Limited Liability Partnership (LLP) Incorporation

Running your business with partners? Limit your liability by registering as Limited Liability Partnership. Purchase plan through TAXAJ and get started right away!

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About This Plan

Registering your firm as a Limited liability partnership involves lesser compliance issues as compared to a PLC registration.

Created by potrace 1.15, written by Peter Selinger 2001-2017

Timeline

It Usually takes 15 to 20 working days.

Buy Now
Services Covered
Who Should Buy
How It's Done
Documents Required
Services Covered

  • Filing of E-forms
  • Drafting of LLP Deed
  • Designated Partner Identification Numbers-DPINs (2 nos.)
  • Digital Signature Certificates-DSCs (2 nos.)
  • Issue of Incorporation Certificate
  • Includes Government Fees upto Rs. 1 Lakh Capital Contribution by Designated Partners
  • Stamp Duty upto Rs. 2000/- and its Notarisation in any state in India for LLP Deed
  • Assistance in Opening Bank Account
Who Should Buy

  • Minimum two Partners or Stakeholders
  • Companies, body corporates or already existing partnerships
  • LLPs registered outside India
  • Startups and SMEs looking for carrying business with minimal legal formalities
How It's Done
    1. Purchase of Plan
    2. DSC
    3. Name Reservation
    4. Filing of LLP and DPIN application with Registrar
    5. Receipt of Registration Certificate
    6. Notarisation of LLP Deed
    7. Application for PAN and TAN
Documents Required

  1. Name, Contact Number and Email Id of all the Stakeholders.

  2. Directors Identification Number, if already.

  3. Self Attested PAN, Aadhar & Passport size photo of all the Stakeholders.

  4. Apostilled Passport, Mobile Bill and other KYC docs in case of NRI Stakeholder.

  5. Specimen Signatures of all Stakeholders.

  6. Few Proposed Business Names along with Objects.

  7. Latest Electricity Bill/Landline Bill of Registered Office.

  8. NOC from owner of registered office. (If Owned)

  9. Rent Agreement from Landlord. (If Rented/Leased)

  10. Brief description of main business activities of the proposed Company.

  11. Shareholding pattern (50:50 or 60:40) between the Stakeholders.

  12.  Total Capital Contribution of the Company.

Other Informations

Compliances for a LLP after Incorporation

Partnership has been the most desirable form of business since ages. Just by adding a prefix i.e ‘Limited Liability’, A new form of business is created which is LIMITED LIABILITY PARTNERSHIP. The ulterior motive for constituting this form of business is to cop up with the drawbacks of partnership and to commemorate with the stringent requirements of company.

So, Limited liability partnership is a form of entity which entails features of a partnership firm and a company. The LLP is managed by its partners and it is a separate legal entity from its partners.

The incorporation process of LLP is simple and it does not require much compliance formalities, hence, LLPs are preferred by Professionals, Micro and Small or closely-held businesses.

The concept of Limited Liability Partnership has been brought by way of enforcing Limited Liability Act, 2008.


Some of the major benefits enjoyed by LLPs are the following:

  • LLP is separate legal entity form its partners.
  • It can raise funds from Partners, Banks and NBFCs.
  • The procedure for Incorporation, conversion and closure of LLP is simple and easy.
  • It has assets and liabilities that are separate from that of the promoters.
  • LLP can easily Transfer its ownership.

LLP’s are regulated by the Registrar of Companies, Ministry of Corporate Affairs. All LLPs are required to endure compliances and file certain statutory filing with the Government every year. It is mandatory for an LLP to file anAnnual return, which is not linked to Profits or Turnover. Three compulsory compliance with regard to LLP are:

1. Filing of Annual Return

2. Form -8

3. Form -11

4. Maintenance of Books of Account

5. Filing of Income Tax Returns

FILING OF ANNUAL RETURN

a. FORM-8

What consists Form-8?

Form-8 consists of the statement of Account and Solvency. It consists of information related to the statement of assets of the LLP and liabilities and statement of income and expenditure of the LLP.

What is the Due date of filing of this form?

Form 8 should be filed within 30 days from the end of 6 months of the end financial year. i.e. by 30th October of each financial year.

Who shall sign the form?

Designated partners must sign the form digitally. Further, it must be certified by a chartered accountant, auditor or the accountant of the LLP.

How many parts are there in this form?

There are two parts in Form 8. They are:

  • Part A – Statement of Solvency
  • Part B – Statement of Accounts, Statement of Income & Expenditure


b. FORM 11

What consists of Form 11?

Form -11 consist of annual return. It contains the details of all the partners, their contributions towards the LLP, etc.

What is the Due date of filing of this Form-11?

Form-11 should be filed within 60 days of the end of financial year. i.e. on or before 30thMay every year.

Who shall sign the form?

It must be Digitally signed by one of the Designated Partners of the LLP. In case total obligation of contribution of partners of the LLP exceeds Rs. 50 lakhs or turnover of LLP exceeds Rs. 5 crores, then LLP Form 11 needs to be certified by a Company Secretary in whole time practice.

What are the documents required to File LLP Form 11?

Basic details like Total obligation of contribution, total contribution received by partners of the LLP, Summary of Designated Partners and Partners etc.

Further, details of LLP and/ or company in which partner/ designated partner is a director/ partner is attached to the form.

GENERAL QUESTIONS FOR BOTH THE FORMS I.E. FORM 8 AND FORM -11

Do I need to file Form-8 and Form-11 even if no transaction has taken place during the year?

To maintain the active status of the LLP it is required to file the forms even if no transaction has taken place during the year so that MCA is updated with the state of affairs of LLP.

What is the filing fees for Form-8 and Form-11?

The filing fees is Rs. 50 for Form-8 and for Form-11.

1. What is the penalty for late filing of Form-8 and Form-11?

The penalty of Rs.100/day if you have not filed this form.

Is there any chance of waiver of penalty for non-filing of Form-8 and Form-11?

Yes, recently on March 04th 2020, LLP settlement Scheme, 2020 has been launched vide circular 6/2020 under which Form-8 and form-11can be filed without payment of late fees.

2. MAINTENANCE OF BOOKS OF ACCOUNTS AND DOCUMENTS

All LLPs are required to maintain its books of accounts on cash basis or accrual basis. Other relevant documents like incorporation document, names of partners and changes made, proof of fee payment, statement of account & solvency & annual return filed by LLP should also be kept at its registered office. The books of accounts shall also be preserved in the registered office of the LLP for the specified period.

3. FILING OF INCOME TAX RETURNS 

Every LLP has to file income tax return for every year. Since LLP is a separate legal entity, so along with partners income tax return you have to file LLP’s income tax return as well within due date. 

4. LLP AUDIT REQUIREMENT

  • LLP whose turnover does not exceed, in any financial year, 40 lakh rupees or whose contribution does not exceed 25 lakh rupees is not required to get its accounts audited.
  • Where the partners of LLP do not decide for audit of the accounts of LLP,such LLP shall include in the Statement of Account and Solvency, a statement by the partners to the effect that the partners acknowledge the responsibility for complying with the requirements of the Act and the Rules with respect to preparation of books of accounts and a certificate in the specified form specified in FORM 8.
  • The audit of LLP shall be done by a Chartered Accountant in Practice only.
  • An auditor or auditors of a limited liability partnership shall be appointed for each financial year of the LLP for auditing its accounts.


Conclusion 

The requirements mentioned above are compulsory to be followed irrespective of any number of transactions or amount of turnover. Limited Liability Partnership which is flourishing in the business world has bear the burden of multiple compliances to avoid the liability arising from fines and penalties. But is it only for avoiding penalties? The answer is no. Since LLP has to comply way fewer compliances as compared to company it is always better to file all the forms and returns before the due date to escape hefty penalties with timely annual LLP compliance filing.

Frequently Asked Questions:

What is an LLP?

LLP stands for "Limited Liability Partnership" Firm/Company

A Limited Liability Partnership firm (LLP) is a hybrid structure between a partnership firm & a private limited company where the business is carried out in a corporate framework, guided by terms of the mutually adopted partnership deed.

What are the advantages of registering as a LLP over general partnership firms?

An LLP has certain advantages over normal partnership firms

  • Liability- In a general partnership firm, partners are personally liable for debts of the business which means that even their personal property may be used to settle the firm’s debts. Whereas, the liability of partners is limited in case of an LLP.
  • Immunity against wrong doings of other partners- Under LLP structure, partners are not responsible for negligence or misconduct of other partners whereas in general partnership firms, partners can be held responsible.

Our experts shall guide you on how you can get registered under the Startup India Initiative and avail the benefits.

Does the Income Tax Act treat partnership firms and LLPs differently?

Not much except a few things such as

  • Both general partnerships and LLPs are taxed at flat rate of 30%.
  • All the other income tax act provisions apply similarly except that general partnership firms are covered under presumptive taxation scheme i.e if turnover is below Rs. 2 crore in business or Rs. 50 lakh in case of profession, there is no need to maintain books of accounts or get accounts audited whereas, LLPs are explicitly not covered.
What is the minimum capital requirement for LLPs?

There's no such limit in a LLP

There is no minimum capital contribution requirement. It can be registered even with Rs. 100 as total capital contribution.

Do I need to be physically present during this process?​

No, not at all.

→ No, your physical presence is not required during the process.

Is stamp duty payable during incorporation process?​

Yes, Stamp duty are charged by state of registered office.

Yes, Stamp duty charges are imposed by the state in which the registered office is proposed to be located. The charges are on Partnership Deed & Other Forms filed in the process. Our experts will guide you on additional charges, if any.

I already have my digital signature certificate and DIN. Will the package be discounted now?​

Yes, of course! We only charge for what we do.

In case, you already have a DSC and DIN, our experts will offer you some concession accordingly on the above package.

What is the audit requirement for LLP?

Audit is needed only when your business has started flourishing

  • Accounts of an LLP are required to be audited when the turnover is Rs. 40 lakh or more or when the total capital contribution is Rs. 25 lakh or more.
  • The auditor of an LLP is appointed annually by the designated partners.
  • The first auditor is appointed before the end of the financial year. Subsequent appointment or reappointment of the auditors is made one month before the closing of the financial year by the designated partners.
What is the stamp duty payable for LLP incorporation?​

Feel Free and Connect With Us

→ Normally the Stamp Duty is charged at certain percentage of Capital Contribution that varies upon state to state, therefore our expert shall guide you on this once you proceed with the plan.


Apart from this, notary charges will apply for two director affidavits and related stamp duty.

Can an NRI also become a partner in LLP? And what additional documents will be required to be submitted?​

Yes, an NRI or foreigner can be a Partner in LLP.

→ Yes, an NRI or any foreign national can become a Partner in LLP. But such person can be taken as a partner only when there is one partner who is a Resident of India. Additional documents required:

  • Copy of Passport Copy Which is attested by Consulate of Indian Embassy or Foreign Public Notary.
  • Copy of Driving License/ Bank Statement or Electricity Bills copy or Any Property Tax Payment Receipt which is attested by Consulate of Indian Embassy or Foreign Public Notary.

RBI approval is required for foreign capital contribution. Additional charges will be applicable for RBI approval. Our experts will advise you on the applicable charges.

Me and my partner are both partners & shareholders in our company. We wish to bring in two additional shareholders as well. Is that covered in the package?

Feel Free and Connect With Us

→ In the current package, we cover upto 2 digital signatures for two directors. For two additional shareholders, you need to secure two additional digital signatures certificates. We offer digital signature certificate - Click here to purchase digital signature

My details on my documents have a difference. Can I still incorporate my LLP using them?

Feel Free and Connect With Us

→ You will need to have exactly the same details on all your documents to incorporate your company.

Why is there delay in getting our incorporation certificate?

Feel Free and Connect With Us

→ Due to the increasing enthusiasm among too many entrepreneurs who wish to incorporate their companies, the MCA has made stringent rules to approve the company name and issue the certificate of incorporation. Further, due to excessive demand, the PAN and TAN applications are also increasing and thus it is understood that this processing will take time too. So, we could take a range between 20-25 working days to complete the company incorporation process and receive the certificate of incorporation.

How can I Register/Associate my DSC with MCA for filing any form ?

   Steps to Register/Associate DSC on MCA Portal (http://www.mca.gov.in/mcafoportal/showAssociateDSC)


  1. Click on the 'Register DSC' link available on the MCA portal homepage.

  2. On the next screen, click on the 'Director' link on the left hand panel and fill-up your DIN. Please ensure that the DIN is approved and typed correctly.

  3. System shall verify that the DIN is valid and approved. If the DIN is filled incorrectly or DIN filled is not approved, system will throw an error message to that effect.

  4. Fill-up rest of the particulars and ensure that details filled are as per DIR-3. If the applicant has filed DIR-6, then fill the details as submitted in DIR-6 form.

  5. Click on the 'Next' button. The system would verify the details.

  6. If the details filled do not match with DIR-3/ DIR-6, as the case may be, for the reason that you do not have your DIN application details, you can get the details from the company in which you are a director.

  7. If the details are correct, the system would prompt you to select the DSC.

  8. Click on the 'Select Certificate' button to browse and select the certificate. Please ensure that the selected DSC belongs to the applicant, whose particulars are being registered.

  9. System shall validate the DSC. If the selected DSC is already registered against given DIN, system will give an informatory message. If a different DSC is already registered against the given DIN, system will ask if the user wants to update his/ her DSC.

  10. Type the displayed system generated text for verification in the box provided.

  11. Click on 'I agree' button to agree to the declaration that details furnished are correct.

  12. Click on the 'Submit' button to register your DSC.

  13. Acknowledgement message is displayed to the user.

  14. User can take a print-out of the acknowledgement.

  15. The applicant can click on the 'Reset' function to clear the data in the fields.