How Can An LLP (Limited Liability Partnership Firm) be Set Up in India?

 LLP or Limited Liability Partnership is a modern type of business incorporation which has become popular among the budding entrepreneurs for its several business benefits.

Here, you need at least two business partners to form the LLP or Limited Liability Partnership firm. There is a special meaning related to the term ‘Limited Liability’. It means neither of the two business partners or more than that has to bear complete responsibility for the business’s liability indebtedness. 

Another benefit of the Limited Liability Partnership firm is not one partner responsible for the other partner’s wrongdoing. These are the reasons business persons love to establish the LLP (Limited Liability Partnership) firm among themselves.  

 

Notable Features of the LLP Act 2008

There are a few notable features that are associated with the LLP (Limited Liability Partnership) Act 2008 which is conducting the LLP-related components in India - 

1. The LLPs are considered an evolved form of the partnership firm. The LLP firms are under the authority of the Registrar of Companies. 

2. The LLP is too specific about the number of business partners. You can only incorporate an LLP if you are running the business with at least two partners. Though there is no maximum limit for the LLP business colleagues, the rule is at least one of the partners should be an Indian resident.

3. The Account Books of the LLP must be audited every year. 

4. An official agreement must be created for the LLP partners that can designate which LLP associate is managing what kind of responsibility.

5. You have to abide by all the rules strictly if you want to amalgamate or merge with another company as per the LLP Act 2008.

These are the five notable features of LLP you cannot ignore. 

The Special Benefits of Founding an LLP

You have to register LLP company to avail of special benefits. One of the benefits is that LLP has no such specific criteria as a minimum capital contribution. You can open an LLP with the minimum capital you and your partner have.

Other than no minimum capital contribution or financial obligation, another benefit of LLP is at some phases, you are going to get corporate tax exemption. For example, you can get tax privileges like MAT (Minimum Alternate Tax), dividend distribution tax, and so on.

An LLP which is formed as MSME (Micro Small and Medium Enterprise) and Startups can get loan benefits. The Limited Liability Partnership companies can get another benefit like audit is not mandatory here. It is an advantage only available for the LLPs. An audit is compulsory for Private Limited Companies and Public Limited Companies but there is nothing such as a compulsory audit for the LLPs.

  

Steps Required for Incorporating an LLP

A company can be incorporated as an LLP after it passes through several steps or hurdles.

1. First of all, a Digital Signature Certificate (DSC) of at least two partners is required.

2. The next step is the requirement of the Director Identification Number (DIN) of the two designated LLP partners. 

3. The third step is checking the availability of the company’s name that you have decided. Check the company’s name that you have selected by using the (Reserve Unique Name LLP) RUN LLP web service system.

4. You can check the MCA (Ministry of Corporate Affair) website regarding LLP incorporation and RUN LLP-related issues.

5. The FiLLiP form is another key point that every business person goes through while setting up an LLP. FiLLiP offers a multi-service range like LLP incorporation, name reservation, and allotting the DIN.  

These are the five points that are attached to register LLP company in India. Additionally, a business person has to keep in mind that the all-important LLP agreement must be created within 30 days of the LLP incorporation.

How Online Legal India™ Can Help You in Setting Up LLP?

You can trust Online Legal India™ while you intend to set up an LLP. By paying minimal LLP incorporation fees and the least documentation process, you can incorporate your dream LLP (Limited Liability Partnership) company. 

The Online Legal India™ experts can take the responsibility of creating DSC and DIN on behalf of you and your partner. It is their responsibility to submit all the documents to the Registrars of Companies. Within a few days, the LLP incorporation certificate will reach you.