{"id":131,"date":"2020-06-23T10:43:30","date_gmt":"2020-06-23T10:43:30","guid":{"rendered":"https:\/\/www.smartauditor.in\/blog\/?p=131"},"modified":"2020-07-25T09:05:00","modified_gmt":"2020-07-25T09:05:00","slug":"llp-registration-features-aware","status":"publish","type":"post","link":"https:\/\/www.smartauditor.in\/blog\/llp-registration-features-aware\/","title":{"rendered":"Are you aware of these features of LLP? If not, You must Read it!!!!"},"content":{"rendered":"

Limited Liability Partnership in short we can say LLP is a Hybrid structure. Hybrid of a Company and a Partnership Firm<\/a>. It is a unique corporate structure that has certain features of limited liability of the company and the flexibility of a Partnership Firm.<\/span><\/p>\n

 <\/span>Changes of partners and the un-authorized actions of partners will not affect the existence or the continuity of LLP. LLP is totally a separate legal entity since entering into contracts and holding property in its own name. Each right and duties of the partners in an LLP are governed by a mutual agreement between the partners or between the partners and the Limited Liability Partnership. LLP agreement is a fundamental part of the whole entity. It defines the terms, responsibilities, shares, conditions of the relationships, etc. Every function in a Limited Liability Partnership is based on that agreement.  So the partners cannot lead any wrongful business decisions or misconduct. Based on the mutual agreements one partner is not responsible for the other partner\u2019s malpractice.<\/span><\/p>\n

 Also, LLP is liable to the full extent of its assets but the partner\u2019s liability is limited to their contribution. <\/span><\/p>\n

If you are applying for an LLP Registration<\/a>, then you should be aware of the types of partners. In a Limited Liability Partnership, there are two types of partners, designated partner and managing partners. Partners who are managing the whole business are called managing partners. Partners those who are dealing with Compliances of LLP Act, Income tax, etc are known as Designated partners. Sometimes, the designated partners can act as managing partner. But it is not true for all the cases. <\/span><\/p>\n

Why do most of the people choose LLP instead of other business forms?<\/h2>\n

\"\"<\/p>\n

The greatest advantage which attracts more people is LLP\u2019s Flexibility. LLP offers flexibility to process the business. There are no complex legal provisions and it is free to process and manage. Also, these advantages are not available in any other business forms. So, most of the companies have started to convert or incorporate their business in a Limited Liability Partnership. Here are some key points of Why do most of the people choose LLP Registration<\/a> instead of other business forms. <\/span><\/p>\n

    \n
  1. The cost of registration is Low.<\/span><\/li>\n
  2. Separate Legal Entity<\/span><\/li>\n
  3. Partner\u2019s Liabilities are Limited <\/span><\/li>\n
  4. Easy to incorporate<\/span><\/li>\n
  5. There is no minimum Capital Contribution<\/span><\/li>\n
  6. Unlimited number of Partners<\/span><\/li>\n
  7. Personal Assets of the partners does not have any impact on the company except in fraudulent cases<\/span><\/li>\n
  8. Unlike a company, there is no tax that may charge in case of profit distribution to the partners.<\/span><\/li>\n
  9. LLP<\/strong> is flexible since the rules are framed by partners<\/span><\/li>\n
  10. Less Compliance as compared to Company<\/span><\/li>\n<\/ol>\n

    Which are the firms where LLP is Suitable for?<\/h3>\n

    \"LLP<\/p>\n

      \n
    1. Small to medium scale businesses<\/span><\/li>\n
    2. Most of the service based industries<\/span><\/li>\n
    3. A business where multiple partners and they have multiple roles<\/span><\/li>\n
    4. Businesses are driven by owners but have investors who play as a silent partner role.<\/span><\/li>\n
    5. Start-ups<\/span><\/li>\n<\/ol>\n

       What are the minimum requirements to form a Limited Liability Partnership?<\/strong><\/h3>\n
        \n
      1. There should be a minimum of two partners <\/span><\/li>\n
      2. There should be a minimum of two designated partners among the total partners of Limited Liability Partnership<\/span><\/li>\n
      3. Registered Office Address should be in India<\/span><\/li>\n
      4. At Least 1 partner should be an Indian Resident<\/span><\/li>\n
      5. You can incorporate Limited Liability Partnership only for Profit-making<\/span><\/li>\n<\/ol>\n

        What are the processes in LLP Registration?<\/h4>\n

        \"LLP<\/p>\n

          \n
        1. Deciding Partners<\/span><\/li>\n<\/ol>\n

          The very first step of LLP Registration<\/a> is deciding the partners.  Individuals who are resident in or outside India, LLP Registered in or outside India and the companies or body corporate which are registered in or outside India can apply as a partner in LLP.<\/span><\/p>\n

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          1. Obtaining Digital Signatures of Designated Partners<\/span><\/li>\n<\/ol>\n

            A digital signature is a mandatory thing for all Legal Services. It is an electronic fingerprint. It reduces the processing time and allows the company registration<\/a> to be done without the physical presence of the director.<\/span><\/p>\n

              \n
            1. Applying for DIN of Designated Partners<\/span><\/li>\n<\/ol>\n

              DIN or Director Identification Number is a unique 8 digit code. Every existing or proposed director should acquire that DIN. At first, Din was introduced in the Companies Amendment Act, 2006.<\/span><\/p>\n

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              1. Checking Name Availability of LLP<\/span><\/li>\n<\/ol>\n

                After getting DSC<\/a> and DIN we have to check the name availability of LLP. Name availability can be checked on the MCA Website. This is mainly to avoid further legal problems based on similarity in the company name. If any other company registered in the same name we cannot apply for the same name. If we should have done so it results in objection and further denial of the name.<\/span><\/p>\n

                  \n
                1. Applying for Name Approval<\/span><\/li>\n<\/ol>\n

                  If the name is available, then we can apply for approval. This guarantees 100% approval since the name is not registered as any other company name.<\/span><\/p>\n

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                  1. Preparing & Filing Incorporation documents<\/span><\/li>\n<\/ol>\n

                    For Incorporation, We need the following documents with self-attested<\/span><\/h4>\n