What is LLP Registration?
Limited Liability Partnership (LLP) Registration as the name suggests defines limited liability to its partners. Thus it has features of both, a corporation and a partnership. One partner is responsible for only his own actions and not the actions of his partner. LLPs are governed by Limited Liability Partnership Act(LLP Act), 2008.
Documents required for LLP Registration
1. PAN Card of Directors
2. PAN card of all partners.
3. Address proof of all partners.
4. Utility Bill of the registered office
5. A No-Objection certificate from the landlord
6. A copy of the rental agreement.
7. Get your DSC
Features of LLP
LLP company is treated like any other partnership firm for taxation purposes
One of the partners in LLP company,must be an Indian
Registrar of Companies registers and controls LLPs in India
No partner is liable on account of the independent or unauthorized actions of other partners, thus allowing individual partners to be protected from joint liability created by another partner's wrongful business decisions or misconduct.
Liability is limited to each partner agreed upon contribution to the LLP company in India.
Advantages of LLP Registration
LLPs are treated as separate legal entities so the partners and LLP are distinct from each other in the eyes of the law.
There is no requirement of minimum capital to start a limited liability partnership.
Number of Members:
Only two members are required to form Limited Liability Company while there is no limit on maximum number of partners in LLP.
Auditing of LLP in India is required only if contribution exceeds 25 lakhs or annual turnover exceeds 40 lakhs.
It is easier and flexible to manage organisational structure of LLP as compared to other company structures.
Dividend distribution tax and Minimum alternative tax is not applicable on LLPs and thus it is an added advantage.
Owning a property:
an LLP in India can own a property as it has separate legal recognition in the eyes of law.
Disadvantages of LLP Registration
1. Few of the states in India have restricted formation of LLP in state due to various tax benefits.
2. LLPs are not looked as an investment opportunity by angel investors.
3. Trust of people is more on companies and partnerships as compared to LLPs.
4. LLP in India was introduced in 2009 thus they have less recognition.