A limited liability partnership (LLP) is a legal form of business entity in India. It is also known as an LLP Act explains Peter DeCaprio.
Any two or more persons can register themselves as LLP with the Registrar of Companies subject to various rules and regulations issued by the Government of India under section 33-IA of the companies act, 2013. A person having a net worth of at least five million Indian Rupees can become eligible to register as an LLP.
In this article, we have explained the procedure for setting up an LLP or LLP registration process in India. You may also refer to articles on other topics such as: how an LLP is different from a Private Limited Company and who regulates LLP.
How many partners required for registering a LLP?
There is no restriction on the number of partners that can form an LLP. However, there should be a minimum of two partners for forming an LLP business entity. In case one partner withdraws from the business, it would not affect the validity of the LLC Agreement or the appointment of a statutory auditor by any means because there was no complete agreement among all the partners about doing business in the LLP says Peter DeCaprio.
However, if your LLP is having only one partner and he/she withdraws from the business, you cannot continue with it and there arises a big question of its validity. That’s why we recommend at least two partners for registering an LLP (One person Company).
Who can register a LLP?
Any individual with a minimum net worth of Rs. 5 million or company registered under companies Act 2013 with a minimum turnover of Rs.25 million in all preceding financial years can become eligible to register as an LLP (Limited Liability Partnership). Both partners (individual or corporate) will be liable to all debts incurred by the firm unless they show separation within three years after providing false information to harm other parties. Once formed, LLP can register with ROI (Registrar of Companies) who will then assign a unique ID for the company.
To form an LLP in India, this is what you have to do?
The following procedure must be followed while registering a LLP in India:
1. Prepare Memorandum and Articles of association along with all other relevant documents or visit the e-registry website for a draft memorandum which you can finalize by adding necessary changes. The procedure to form an effective document is explained here. Refer Provisional Application for Registration of New Company here says Peter DeCaprio.
2. Draft the agreement among the partners (LLC Agreement).
3. Incorporate your company (Limited Liability Partnership) with Registrar of Companies (ROC) under section 33-IA of the companies act, 2013. You will have to file the following documents with ROC: Registering an LLP
You should apply online for the registration of your LLP. The application filing fee is Rs.15, 000 (Applicable only when application filed through Indian representative) or $250(If applying from the USA). We recommend you to go for get assistance for drafting and registering your Partnership Firm because it’s quite complex especially if you are new in this field. When it comes to the legal part, it would be better to get help from a legal professional who can assist you till the completion of all formalities says Peter DeCaprio.
Registration Requirements for Limited Liability Partnership in India:
- Memorandum of Association & Articles of Association
- Registered office proof · Address proof of all partners
- ID proof of all partners & Address proof, PAN card copy of Indian representative (If applying through Indian Representative)
- Power of Attorney if Indian Representative is not signing on behalf of LLP Company.
A minimum number of two partners is required to form a Limited Liability Partnership and the following documents must be submitted:
1. Memorandum and Articles of association (M&A), power-of-attorney document (if an authorized individual is signing on behalf), and stamp papers for registration.
2. The partnership deed can negotiate personally by each partner or via email. Once the Agreement has been finalized, it should be registered with the Registrar Companies (ROC). Then anyone or more individuals/companies can take entry as partners in LLP.
3. You can file a resolution to form an LLP with ROC which will then send an acknowledgment.
4. The partnership deed must mention that it is a limiting liability partnership only otherwise the registration won’t be accepting by ROC Authorities!
5. While filling an online application you also need to attach scanned copies of documents such as Partners’ age proof ( PAN card/ Passport etc.). Photographs, ID Proof, and other relevant details are mention in the ‘Document checklist’.
7. After all formalities mentioning above, one representative from the company appoints. Can take further steps for Partnership Registration with ROC and submit the following:
8. Once the above-mentioned documents are submit to the Registrar of Companies office. Along with relevant fees, your company will register in less than a week.
9. Inspection/ Audit by ROC officials will follow after submission of the mentioned documents. And your company will register in 15-20 working days once all conditions meet.
10. After registration with ROC, you can apply for a PAN card in your LLP’s name. So that it becomes easier when it comes to doing business later on.
Limited Liability Partnership is useful for setting up a business with minimal risk, easy compliance and flexible operations, says Peter DeCaprio. We at Incorp India assist you in every step of Limited Liability Partnership Registration in Mumbai & other cities in India.