Limited Liability Partnership (LLP) Registration

LIMITED LIABILITY PARTNERSHIP (LLP) REGISTRATION

Limited liability partnership (LLP) is a type of general partnership where every partner has a limited personal liability for the debts of the partnership. Partners will not be liable for the tortious damages of other partners but potentially for the contractual debts depending on the state.

LLPs are popular for larger partnerships and especially for professionals, and some states only allow professionals to use the LLP format. Like with general partnerships, an LLP must have two or more partners, but an LLP has flexibility in structuring how the amount of control and proceeds each partner retains. Almost all decisions in an LLP can be allocated to certain partners except those involved in changing the partnership agreement that require approval of all partners.

 

Characteristic of Limited Liability Partnership (LLP)

1. LLP is organized and operates on the basis of an agreement.
2. LLP is organized and operates on the basis of an agreement.
3. LLP is enables professional/technical expertise and initiative to combine with financial risk-taking capacity in an innovative and efficient manner.
4. LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession.
5. LLP will have lesser compliance requirements as compared to a company.

Benefits of Limited Liability Partnership Registration

1. Separate Legal Entity

An LLP enjoys an independent legal status, just like companies. The LLP holds different status from its partners. Such entities have the right to sue the third party in case of legal dispute and vice versa. The contracts are signed in the LLP’s name, which provides a sense of confidence to various stakeholders and end-users.

2. Flexibility

The operations of an LLP are determined by the LLP agreement, which is based on the mutual decision of the company’s members. This makes the company’s functioning quite flexible compared to other forms of company.

3. Lower cost of Formation and Compliances

The cost of Incorporating an LLP is relatively low compared to other business structures such as a private and public limited company. Also, the quantum of compliances is on the low for these entities. The LLP is mandated to file only two statements a year, i.e. Statement of Accounts and Solvency and an Account return.

4. No Need of Minimum Capital Contribution:

The LLP can be incorporated in the absence of any minimum capital. Also, there is no requirement to procure any amount of capital contributed by the concerned partners

Name of others Countries where this LLP is available

The LLP structure is available in countries like United Kingdom, United States of America, various Gulf countries, Australia and Singapore. On the advice of experts who have studied LLP legislations in various countries, the LLP Act is broadly based on UK LLP Act 2000 and Singapore LLP Act 2005. Both these Acts allow creation of LLPs in a body corporate form i.e. as a separate legal entity, separate from its partners/members.

Difference Between LLP & traditional partnership firm

• Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner.
• Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct.

 

Difference between LLP & a Company

• A basic difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute act, whereas for an LLP it would be by a contractual agreement between partners.
• The management-ownership divide inherent in a company is not there in a limited liability partnership.
• LLP will have more flexibility as compared to a company.
• LLP will have lesser compliance requirements as compared to a company.

 

List of Documents Required for the Registration of Limited Liability of Partnership (LLP)

1. Pan Card of Partners
2. Self-Attested passport, Voter Id card, Driving License, Aadhar Card
3. All Partner shall provide Latest Bank Statement not older than Two Months
4. Company Address: Latest Electricity Bill, Phone Bill, Gas Bill, not older than Two Months Can be used as proof of the registered office address

5. Partners recent passport size photo
6. Every Partner email id and phone no