Easy Steps for India LLP Registration
India Limited Liability Partnership (LLP) is a popular and well-known business structure in India. Corporate Customers, Vendors and Government Agencies choose to deal with India LLP rather than dealing with a sole proprietorship or regular partnerships. India LLP Registration is easy to manage from a compliance perspective. LLP is ideal for small and medium enterprises (SME). An audit is also not required for LLPs having turnover not exceeding Rs. 40 lac.
Why Choose an LLP in India?
In India, a Limited Liability Partnership (LLP) was formed by the Limited Liability Partnership Act, 2008. A Limited Liability Partnership’s most significant benefit over a conventional partnership company is that one party in LLP is not responsible for the other partners’ actions. An LLP also provides safeguard against the debt of limited liability Partnership to the owner while at the same time protecting one partner from the negligence of another partner.
Therefore, all partners in an LLP like the perks of protection like the shareholders of a Private Limited Company. Unlike private limited company shareholder; however, an LLP’s partners have the power to manage the business directly. Incorporating and managing in integrated industries in India it is the most natural type of industry. With a straightforward process of incorporation and simple compliance formalities, LLP is preferred by closely held professionals, micro and small businesses.
Application for an Indian LLP
To apply an Indian LLP, you must initially register for a Designated Partner Identification Number (DPIN), which can be completed by submitting electronic form for DPIN or DIN acquisition. Then you’d need to purchase your Digital Signature Certificate and register the same on the portal. You then need to get the Ministry ‘s approval of the LLP term. Once the LLP name is approved, you can register the LLP by submitting the incorporation form. Here are the simple steps for an Indian LLP Registration:
Step 1: Application for DIN or DPIN
All approved LLP members must receive ‘Approved Partner Identification Number (DPIN).’ To receive DIN or DPIN you will need to submit eForm DIR-3. If you already have a DIN (Director Identification Number) then you can use the same as a DPIN.
Step 2: Acquire/ Register DSC
The Information Technology Act, 2000 allows for the usage of Digital Signatures on the electronically signed documentation to guarantee the confidentiality and validity of the electronically registered records. That is the only safe and accurate way a document can be electronically sent. Consequently, all filings made by the LLP(s) must be filed using Digital Signatures by the person authorised to sign the documents.
Confirming Authority (CA) means a person who has been approved a license to provide a digital signature certificate under Section 24 of the Indian IT-Act 2000. Register DSC – Role verify can be acted once the people who signed have registered their Digital signature certificates (DSC) with LLP application.
Step 3: New User Registration
To file an electronic form or to avail any paid service on LLP portal; you are first required to register yourself as a user in the relevant user category, such as registered and business user.
Step 4: Incorporate an LLP
Apply for registration of the LLP name by filing Form 1 (Reservation Application or Name Change). After that, it is based on the proposed LLP, file mandated incorporation of Form 2 (Document of incorporation and Statement of Subscriber). Once the form is approved by the Ministry official concerned, you will receive an email about it, and the status of the way will be provided.
Step 5: File LLP Agreement
After incorporation of LLP, an initial LLP agreement is to be submitted within 30 days of incorporation of LLP. The user has to submit the information in Form 3 (Information about the Limited Liability Partnership Agreement and changes, if any, made therein).
LLP is a distinct legal body that gains Private Limited Corporation and Relationship Firm ‘s versatility because no party is kept responsible for the actions of the other party, and the LLP Arrangement regulates their privileges and duties. LLP may also become a shareholder of another limited liability agreement that gives the members the advantage of limited liability, thus having minimum maintenance. Private limited company owners have limited liability towards creditors. In the case of a default, banks/creditors may only sell the properties of the company and not the directors’ assets.