What is LLP Registration?
LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name. The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP. Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct. Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.
What are the features of Partnership?
LLP is a body corporate
LLP is a body corporate, formed and incorporated under the Act. It is a legal entity separate from its partners.
A limited liability partnership can continue its existence even after the retirement, insanity, insolvency or even death of one or more partners. Further, it can enter into contracts and hold property in its name.
Separate Legal Entity
A LLP is a separate legal body. Further, it is completely liable for its assets. Also, the liability of the partners has certain limitations in their contribution to the LLP. Hence, the creditors of the LLP are not the creditors of individual partners.
Another difference between an LLP and a partnership firm is that independent or unauthorized actions of one partner do not make the other partners liable. All partners are agents of the LLP and the actions of one partner do not bind the others.
An agreement between all partners governs the rights and duties of all the partners. Also, the partners can devise the agreement as per their choice. If such an agreement is not made, then the Act governs the mutual rights and duties of all partners.
Artificial Legal Person
For all legal purposes, LLP is an artificial legal person. A legal process creates it and has all the rights of an individual. It is invisible, intangible, and immortal but not fictitious since it exists.
If the partners decide, the LLP can have a common seal [Section 14(c)]. It is not mandatory though. However, if it decides to have a seal, then it is necessary that the seal remains under the custody of a responsible official. Further, the common seal can be affixed only in the presence of at least two designated partners of the LLP.
According to Section 26 of the Act, every partner is an agent of the LLP for the purpose of the business of the entity. However, he is not an agent of other partners. Further, the liability of each partner has limitations to his agreed contribution to the LLP. It provides personal liability protection to its partners.
Minimum and Maximum Number of Partners in an LLP
Every Limited Liability Partnerships must have at least two partners and at least two individuals as designated partners. At any time, at least one designated partner should be resident in India. There is no maximum limit on the number of maximum partners in the entity.
Business Management and Business Structure
The partners of the LLP can manage their business. However, only the designated partners are responsible for legal compliances.
Business for Profit Only
Limited Liability Partnerships cannot be formed for charitable or non-profit purposes. It is essential that the entity is formed to carry on a lawful business with a view to earning a profit.
The power to investigate the affairs of an LLP resides with the Central Government. Further, they can appoint a competent authority for the same.
Conversion into LLP
A private company, firm, or an unlisted public company or a small business can convert into an LLP in accordance with the provisions of the Act.
What documents are required for registering a Limited Liability Partnership in India?
For getting a LLP registered in India following documents are required. Please refer below the documents required for registering a LLP and the list is illustrative and we may require additional documents and information from time to time to complete the registration.
- Passport sized photographs of all the Directors
- Identity Proof – PAN Card/Passport if applicant is foreign national, voter ID.
- Address Proof – Driving license or Aadhar card and bank statement or utility bill not older than two months.
- Place of business – Ownership documents/ lease deed, Electricity Bill, bank statement or telephone bill not older than two months. The No Objection from the owner to use the premises as a registered office.
- Proof of evidence of any utility services like gas, electricity, telephone stating the address of the premises bearing the name of the owner or document not older than two months.
- Any other document or details if required will also be communicated
Taxcellent helps you in registering a Limited Liability Partnership within 20 days. We promise you to provide best service for registration and after compliances activities.