Recently, Limited Liability Partnerships (LLP) have become a popular form of organisational setup amongst entrepreneurs. The concept of an LLP was introduced in India in 2008, and it consisted of the amalgamation of features of a partnership firm and company into a single organisation. Thus, an LLP provides more of a hybrid setup that allows business owners to benefit from the features of these two entities in one go. Continue reading to learn more about the features of an LLP and how to go about the registration process for the same.
What are the features of an LLP?
Before moving on to the LLP registration process, you must take a look at its predominant features. They are as listed below:
LLPs are separate entities, just like companies.
The liability of each partner is limited as per their contribution.
The cost undertaken to incorporate an LLP are low.
With LLPS, you have to adhere to fewer compliances and regulations.
You do not have to meet a minimum capital contribution in an LLP.
The minimum number of partners needed to incorporate an LLP is two, with no upper limit for the same. Out of all the partners, two must be individuals, and one of them must be a resident of India. An LLP agreement is used to demarcate the rights and duties of the partners.
An LLP offers advantages like being a separate legal entity that allows partners to enjoy limited liability. However, raising capital with an LLP is difficult, and if the minimum number of partners falls below two for six months, then the LLP is dissolved.
How does LLP company registration work?
To complete the registration of LLPs, you have to follow the steps given below:
Step 1: Getting a Digital Signature Certificate (DSC): Since LLP documents are filed online and require to be signed digitally, you must get this certificate. You can get a DSC from certified agencies so you can certify any documents pertaining to your LLP.
Step 2: Apply for a Director Identification Number (DIN): You have to apply for a DIN for all your designated partners. The application has to be in Form DIR-3, along with scanned copies of the required documents. Ensure that this form is signed by a Company Secretary who is a full-time employee at the company or by the Managing Director/ Director/CEO/CFO of the company.
Step 3: Get name approval: You have to get your LLP-RUN (Limited Liability Partnership-Reserve Unique Name), which allows you to reserve the name of your proposed LLP. This request is processed at the Central Registration Centre under Non-STP.
Step 4: Incorporation of LLP: To incorporate your LLP, you have to use the FiLLiP (Form for incorporation of Limited Liability Partnership) form/. You have to file it with the registrar having jurisdiction in the state where the LLP’s registered office is located.
Step 5: File an LLP Agreement: LLP agreement must be filed in Form 3 online via the MCA portal. It has to be filed within 30 days from the date of incorporation. It also has to be printed on stamp paper.
Now that you know more about the process for the registration of LLPs, make sure that you follow the regulations to set up your business.
HDFC Bank realises the importance of registering an LLP for newer businesses. Thus, HDFC Bank offers a wide range of products and services that can help you manage LLP registration fees and other charges. At HDFC Bank, you can find loans for MSMEs and SMEs that will help you meet your capital requirements. You can also rely on HDFC Bank and the credit and Overdraft Facility offered for short-term financing.
To learn more about all the ways in which HDFC Bank can help you grow your operations, you can visit the MyBusiness page right here.
Read more about the difference between LLP and PVT LTD here.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. HDFC Bank recognises the challenges entrepreneurs face while acquiring capital. Thus, HDFC Bank has created MyBusiness, a one-stop solution that gives you easy access to loans, digital solutions and provides you with the essential knowledge you need to run your business. With HDFC Bank MyBusiness, you can scale up, expand your operations, and nurture your business.