Setup StartupLLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
Real Estate Developers, family owned businesses and service sector firms generally prefer Limited Liability Partnership. It has become popular because it has advantages of both partnership firms as well as Private limited company. Businesses prefer this entity because it has feature of Limited Liability and still the compliance is lesser than that of Private Limited Company. LLP is governed by the Ministry of Corporate affairs and Limited Liability Partnership Act, 2008.
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It offers a great advantage to the partners for limiting their personal risk because an LLP can enter into a contractual relationship in its own capacity. Businesses prefer LLP registration over partnership so that their personal assets remain safe in case of loss, or even insolvency. Liability of financial contribution of any partner is restricted to the capital contributed as per the LLP agreement.
Governed by the LLP Act of 2008, it allows the business to contract with other entities, take legal action, own assets and borrow funds in the name of an LLP itself unlike Patnership firms. It has a separate legal identity than its partners.
Unlike partnership/ proprietorship which gets dissolved on the death of its owner, Pvt Limited Company continues its operation as shares are transferred to the nominee and new Director is appointed.
A key benefit of registering an LLP over a private company is lesser compliance requirement. It doesn’t have a mandatory audit requirement until a certain level of turnover or contribution. Unlike companies, compliances related to board meetings, statutory meetings, etc. do not apply to LLPs.
PAN Card of shareholders and Directors. Foreign nationals must provide a valid passport.
Aadhar card and Voter ID/ Passport/ Driving License of Shareholders and Directors.
Latest Telephone Bill /Electricity Bill/ Bank Account Statement of Shareholders and Directors.
Latest Passport size photograph of Shareholders and Directors.
Latest Electricity Bill/ Telephone Bill of the registered office address
No Objection Certificate to be obtained from the owner(s) of registered office
Rent Agreement of the registered office should be provided if any
In case of NRI or Foreign National, documents of director(s) must be notarized or apostilled
Fill up basic details in form & share required documents.
Do nothing & Cooperate with us.
You will get the registration certificate
| Entity Type | Private Limited Company | One Person Company | LLP | Partnership Firm | Sole Proprietorship | |
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| Act | Companies Act, 2013 | Companies Act, 2013 | Limited Liability Partnership Act, 2008 | Indian Partnership Act, 1932 | No Specified Act | |
| Liability Of The Owner/Shareholder/Partner | Limited to share | Limited to share | Limited to share | Unlimited | Unlimited | |
| Liability of members is limited to the extent of unpaid value of shares subscribed | Liability of members is limited to the extent of unpaid value of shares subscribed | Liability of partners is limited to the capital amount agreed to introduce | Partners are jointly and severally liable to pay the debts of the Partnership Firm | Personally Liable for all the debts. | ||
| Taxation | Low | Low | High | High | Low | |
| Basic Taxation.(Surcharge Varies As Per Income) | 22% | 22% | 30% | 30% | Slab Rates | |
| Dividend Distribution Tax | 20.34% | 20.34% | NA | NA | NA | |
| Minimum Shareholders | 2 Directors and Shareholders | 1 Person | 2 Partners | 2 Partners | 1 Person | |
| Maximum Shareholders | 200 Shareholders | 1 Person | No Limit | 100 Partners | 1 Person | |
| Duration for Registration | 7 - 10 working days | 7 - 10 working days | 7 - 10 working days | 7 - 10 working days | 2-3 working days | |
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Income Tax Return | Income Tax Return | |||
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LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
LLP is a body corporate and a legal entity separate from its partners. It will have perpetual succession.
Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner. While under LLP structure, liability of the partner is limited to his agreed contribution.
A basic difference between an LLP and a company lies in the internal
structure. Company is regulated by statute (i.e. Companies Act, 1956) whereas for an LLP it would be by a
contractual agreement between partners.
Yes, an existing partnership firm or a company (unlisted) can be converted into LLP. There are many advantages to converting a partnership firm into an LLP.
The LLP structure is available in countries like United Kingdom, United States of America, various Gulf countries, Australia and Singapore. On the advice of experts who have studied LLP legislations in various countries, the LLP Act is broadly based on UK LLP Act 2000 and Singapore LLP Act 2005. Both these Acts allow creation of LLPs in a body corporate form i.e. as a separate legal entity, separate from its partners/members.
No. The essential requirement for setting LLP is ‘carrying on a lawful business with a view to profit’.
Yes. Body corporate can become partner in an LLP.
Appointment of at least two “Designated Partners” is mandatory for all
LLPs.
“Designated Partners” shall also be accountable for regulatory and legal compliances, besides their
liability as partners
There are no limitations in terms of citizenship or residential status to be a Partner in LLP. Therefore,
the LLP Act, 2008 allows Foreign Nationals, including Foreign Companies & LLPs to incorporate LLP in
India. The pre-requisite is to have at least one Designated Partner who is a resident of India. However,
the person should be of the age 18 years. This is to ensure that the person in LLP is not a minor and
competent enough to enter into contract. Also, the proposed Designated Partner shall have DIN.
No. There is no minimum amount prescribed to form an LLP in India. It can be started with any amount of capital. Although there is no minimum requirement, every partner must make a contribution financially to form LLP. The amount of capital contribution is disclosed in the LLP Agreement and amount of stamp duty is decided by the total contribution amount.
LLP name availability is as an essential part for an online LLP registration. The name of an LLP is reserved through a form named “LLP-RUN” (Reserve Unique Name). The partners can provide maximum of 2 names in preferential order to reserve any one. The registrar may ask to re-submit the application with different name, if names do not fall under criteria of uniqueness, relevancy or does not fulfil the necessary requirements.
LLP Agreement is an agreement executed by all partners after LLP incorporation in India. The agreement prescribes all the clauses related to business, including the rights, roles, duties, and responsibilities of partners. The agreement must be filed within 30 days of the issue of a certificate of incorporation. Failure to do so carries an additional fee of ₹ 100 per day till the date of filing.
The amount of capital contribution is decides the stamp duty on the LLP Agreement in India. The rate of stamp duty varies from State to State. The State Stamp Act will be applied depending on where the registered office is situated. The amount of ₹ 500 is included in our package. Further, the Notary on the Agreement is not a statutory requirement and not required by the MCA. A notary can be required by the bank officials but is not mandatory for incorporation of an LLP.
Yes, a Limited Liability Partnership registered in India can carry on more than one business subject to their relevancy. The activities must be related with each other or in the same field itself. Unrelated activities such as Fashion Designing and Legal consultancy cannot be carried under same LLP. The business activities are mentioned in the agreement and must be approved from RoC.
Statutory audit in case of LLP registration depends on the turnover and contribution of the LLP. If the LLP turnover exceeds ₹ 40 lacs and/or the capital contribution exceeds ₹ 25 lacs, the financial statements must be audited by the Chartered Accountant.
Once LLP registration completes, the partners must open a bank account in the name of LLP for business transactions. There is no additional requirement to be fulfilled. However, the partners must deposit the agreed amount to contribute as and when required. Furthermore, the annual compliance filing must be fulfilled every year.
Yes, Foreign Direct Investment (FDI) is allowed in LLP under the automatic route in the sectors allowed by the Foreign Investments Promotion Board (FIPB). However, Foreign Institutional Investors (Flls) and Foreign Venture Capital Investors (FVCIs) will not be permitted to invest in LLPs. Also LLPs are not permitted to avail External Commercial Borrowings (ECB.)