LLP has a Legal Entity Separate from its Partners

LLP  has Perpetual Succession

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Limited Liability Partnership

Limited liability partnership(LLP) governed by limited liability partnership Act, 2008 which is registered online with registrar of companies( RoC) under MCA. 

    Key Highlights

    • It has status of artificial judicial person
    • Separate Legal Entity distinct form its partner
    • LLP is a hybrid of partnership firm & private limited company as it contains both partnership firm and corporate structure
    • Minimum two partners are required 
    • Liability of partners is limited to their respective agreed contribution
    • There is No minimum capital requirement
    • It is governing is flexible as can be set as per mutual agreement
    • It also has lesser compliance requirement than private limited company

    Factors to be considered in the selection of LLP name

    The company name is the most important factor which attracts the buyers. There are few factors which you should keep in mind:

    • The selected name should be simple and short 
    • There should be meaning in the name
    • The name should be unique and different from others
    • Suffix LLP 
    • The name should not illegal. 

    Advantage & Benefit of Limited Liability Partnership

    l

    Status of Artificial Judicial Person

    A Limited Liability Partnership is recognised by law as an artificial legal person which has the privileges, rights & obligations of its own. It can contract, sue or be sued.

    Separate legal Entity Distinct from Promoters

    Limited Liability Partnership is a separate legal entity distinct from its partners & in case of insolvency partners are not personally liable.

    Limited Liability

    The liability of partner is limited to their agreed contribution.

    Enhanced Borrowing Capacity

    Banks & other financial institution rely & put more trust with regard to capacity & creditworthiness of LLPs.

    Flexibility

    Itoperates on the basis of legal agreement & provides flexibility with regard to legal and procedural requirement.
    Z

    Perpetual Succession

    It means that Limited liability partnership remains in existence even in case of death of all partners as the ownership of shares are inherited by legal heirs.
    U

    Transparency

    LLP are subjected to certain compliance & Audit report is mandatory after threshold exemption. Also, information is easily available in public domain particularly on Ministry of Corporate Affairs website make it transparent for stakeholders.

    Reliable, Reputation, Brand Value

    Due to compliance, transparency & information in public domain, limited liability partnership place reputation, brand value & reliability in the eyes of stakeholders more than a partnership firm but less than private limited company.

    Compare Options

    BasisPrivate Limited CompanyLimited Liability PartnershipOne Person CompanyPartnership FirmSole Proprietorship
    Business Formation10-15 Days10-15 Days10-15 Days21 Days1-2 Days
    Act / LegislationCompanies Act 2013LLP Act 2008Companies Act 2013Partnership Act 1932Not Applicable
    Registering AuthorityROC under MCAROC under MCAROC under MCARegistrar of Partnership under Local SDM OfficeNot Applicable
    Legal StatusArtificial judicial person with limited liabilitySeparate legal entity with limited liabilityArtificial judicial person with limited liabilityPartners are personally liable with unlimited liabilityPromoter is personally liable with unlimited liability
    Members RequiredMinimum - 2
    Maximum - 200
    Minimum - 2
    Maximum - No Limit
    Just One Person with one nomineeMinimum - 2
    Maximum - 100
    Just One Person
    Suitable ForStart-upsProfessional firmsIndividual promotersFamily businessesSmall businesses
    Taxation BenefitsCertain benefits EfficientBenefitsLowestIndividual slab rate
    Compliance ApplicabilityAudit Report, Annual Return, other compliance as per actAnnual Return, Audit report if turnover exceed Rs. 40 lac's in FY or contribution exceeds Rs.25 lacsAudit Report, Annual Return, other compliance as per actAudit Report only as per Income Tax ActAudit Report only as per sec 44AB of Income Tax Act
    Investors InclinationMost attractiveNot preferableUnlikelyUnlikelyNo way
    Perpetualty
    YesYesYesNoNo

    Package & Pricing

    Documents for Online Registration of LLP

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    PAN of Partners

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    Proof of Partners – DL/Voter ID/ Passport (Any one)

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    Address Proof of Partners – Latest 2 month – Telephone/Mobile/Electricity bill/Bank Statement (Any one)

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    Photo of Partners

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    Email ID of Partners

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    Mobile Number of Partners

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    Place of Business Address Proof with NOC (Ownership/ Rent Agreement/ Lease deed/ Consent Letter

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    Electricity bill of place of business (Latest 2 months)

    FAQs

    How many members are required to start a limited liability partnership?

    Minimum two members are sufficient to start a limited liability partnership.

    What is the difference between a LLP and general partnership?

    A Limited Liability Partnership is a legal entity separate from its partners and therefore, offers limited liability to its partners whereby any debts and obligations of the LLP will be borne by the assets of the LLP. In the case of a general
    partnership, the partners are jointly and severally liable for each debt and obligation of the partnership firm.

    What is the difference between LLP & Private limited company?

    A basic difference between an LLP and a company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 2013) whereas for an LLP it would be by a contractual agreement between partners.
    The management-ownership divide inherent in a company is not there in a limited liability partnership. LLP will have lesser compliance requirements as compared to a company.

    What is minimum contribution required to start a LLP?

    There is no requirement of minimum contribution to start an LLP but partners must contribute to form an LLP.

    How many members are required to start a limited liability partnership?

    Minimum two members are sufficient to start a limited liability partnership.

    What is the difference between a LLP and general partnership?

    A Limited Liability Partnership is a legal entity separate from its partners and therefore, offers limited liability to its partners whereby any debts and obligations of the LLP will be borne by the assets of the LLP. In the case of a general
    partnership, the partners are jointly and severally liable for each debt and obligation of the partnership firm.

    What is the difference between LLP & Private limited company?

    A basic difference between an LLP and a company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 2013) whereas for an LLP it would be by a contractual agreement between partners.
    The management-ownership divide inherent in a company is not there in a limited liability partnership. LLP will have lesser compliance requirements as compared to a company.

    What is minimum contribution required to start a LLP?

    There is no requirement of minimum contribution to start an LLP but partners must contribute to form an LLP.