LLP is a separate legal entity, liable to the full extent of its assets; the liability of the partners would be limited to their agreed contribution in the LLP. Further, no partner would be liable on account of the independent or un-authorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful business decisions or misconduct.Creating an LLP is a good way to protect your personal assets from your company’s liabilities, offering protection for your personal assets in the event of a failure. For this reason, forming an LLP is a much secure solution for many small owners than a sole proprietorship or a general partnership.
A limited liability partnership or LLP is similar to a limited company in that it offers limited liability to its members and therefore protects their personal assets. There are, however, three significant differences:
A limited liability partnership is taxed as a partnership and is not subject to corporate dividend distribution tax. There are no directors or shareholders in an LLP instead, it has partners and designated partners. An LLP is governed by the Limited Liability Partnerships Act 2000 and not the Companies Act of 2013.
Step 1:Obtain DSC
Step 2: Apply for DIN
Step 3: Name Approval
Step 3: Incorporation of LLP
Step 3: File LLP Agreement
An LLP is a new form of business which is basically a partnership firm but with limitation on the liability of the partners of the LLP. A LLP is considered as a separate legal entity, perpetual succession, with liability of partners limited to the capital being contributed by them. Hence, a shareholder is not personally liable for the debts of the company. FAQ Of LLP Registration
For small businesses working in the form of LLP audits are not necessary till the turnover crosses 40 Lac or the capital crosses 25 lac.
Any individual can become a designated partner or partner in a Limited Liability Partnership Firm. For becoming a designated partner or partner, no professional or educational qualification is required.
Any person intending to become designated partner in a LLP must apply for director identification number, it is issued by the Ministry of Corporate Affairs. Proof of identity and address is required to be submitted along with requisite fee while submitting the application for DIN. If the documents are in order, the DIN is approved within 3-4 days. The approved DIN is valid for life and the same DIN can be used by the director, even if he/she has directorship in more than one company.
The designated partner(s) has been entrusted with the responsibility of managing the LLP in the best efficient manner. A designated partner is liable for misconduct or fraud or if found guilty of default.
A registered office is required to hold meetings, for keeping records and receiving correspondence from all the statutory/government authorities. The registered office does not have to be necessarily owned by the company, it can be on rented premises also. The registered office of the company determines its jurisdiction for registration, for instance, a LLP with registered office in Delhi will come under the jurisdiction of Registrar of llp, Delhi.
Yes, A LLP can change its registered office any time after following specified procedure. The changed address can be situated within the same state or in a different state from the state in which it was originally registered.