Limited Liability Partnership Registration in Chennai (LLP Registration in Chennai) – Off late a lot of people preferring to set up a Limited liability partnership Company, especially more and more entrepreneurs are opting out for it. LLP is a business structure that came into being by the passing of the LLP Act, 2008 and the notification of the LLP Rules, 2009. It is a relatively new business structure in India and a popular concept in foreign nations such as the UK and Australia
One of the key reasons many small businesses is choosing is, LLP Company incorporates the characteristics of both Partnership firm and Company into a single form of organization and hence carries the benefits of both. Simply a limited liability partnership is a hybrid between partnerships and corporations and is an upcoming area that investors are making use of. Limited Liability Partnership Companies are a body corporate and a separate legal entity from its partners and shareholders.
Let’s understand about the Limited Liability Partnership (LLP) and see the procedure for Limited Liability Partnership Registration in Chennai
What is Limited Liability Partnership (LLP)?
Limited Liability Partnership Companies are a body corporate and a separate legal entity from its partners and shareholders. Among the partners, there should be a minimum of two designated partners, and at least one of them should be resident in India. The rights and duties of designated partners are governed by the LLP agreement. They are directly responsible for the compliance of all the provisions of the LLP Act, 2008 and provisions specified in the LLP agreement
The Law defines LLP as:
“A corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership”.
Features of Limited Liability Partnership (LLP):
- It’s a separate legal entity just like companies.
- The liability of each partner is limited to the contribution made by the partner.
- The cost of forming an LLP is low.
- Less compliance and regulations.
- No requirement of minimum capital contribution.
Steps to Limited Liability Partnership Registration in Chennai (LLP Registration in Chennai)
Steps -1 Obtaining Designated Partners Identification Number (DPIN/DIN)
All designated partners of the proposed LLP shall obtain “Designated Partner Identification Number (DPIN) / Director Identification Number (DIN)”. The applicant is required to attach the identity and address proof (eg: usually Aadhaar and PAN) to the form.
Steps – 2 Digital Signature Certificate
Partner/Designated partner of LLP, whose digital signatures from government recognized certifying agencies. This is because all the documents for LLP incorporation are filed online and are required to be digitally signed.
Steps – 3 Obtaining Name Approval from MCA
Once you obtain a DSC, register a name for your LLP using Form 1 and must get the approval from the registrar. You can use the free name search facility on MCA Portal (Ministry of Corporate Affairs) before quoting the name in the form to avoid the duplicates or resemblance of any firms/LLP/body corporate/trademark or if the name is not undesirable in the opinion of Central Government.
Steps – 4 Incorporating LLP
Incorporate the LLP via Form 2. Provide Details of the Business Activities proposed to be carried out by the LLP. At this stage the LLP agreement must also be made. The form used for incorporation is FiLLiP (Form for incorporation of Limited Liability Partnership Registration in Chennai).
Steps – 5 File Limited Liability Partnership (LLP) Company
The LLP Agreement must be filed as per Section 2(o) of the LLP Act, 2008 using Form 3 on MCA portal.
These are the process for Limited Liability Partnership Registration in Chennai
Checklist for Limited Liability Partnership in Chennai
- There should be minimum of 2 partners and maximum numbers has no limit.
- To start a Limited Liability Partnership (LLP) company, LLP registration is mandatory.
- Liabilities of the partners are limited to the extent of their contribution towards LLP.
- The Name must contain ‘Limited Liability Partnership’ or ‘LLP’ as the suffix.
- The Name of the LLP should not be similar or resemble any existing LLP or trademarks.
- Capital Contributions by the partners of the company.
- The proof of LLP registered office.
Advantages & Disadvantages of Limited Liability Partnership Registration in Chennai
Advantages of LLP:
- There is no minimum capital required for the formation of LLP and LLP can be formed with the least possible capital.
- The cost of registering Limited Liability Partnership Registration in Chennai is low.
- A significant benefit of LLP Company is it doesn’t require to get its accounts audited (if the turnover does not exceeds 1 crore), whereas all company whether private or public irrespective of their share capital required to get their accounts audited.
Disadvantages of LLP:
- LLP have limited funding alternatives to raise funds.
- LLP is not the ideal choice for startups who want to grow big or seek venture capital funding.
- An LLP company cannot issue shares to their employees.
- Though the LLP compliances are minimal, the non-compliances are expensive by paying more fines.
Thus the main purpose of the LLP in India is to introduce a form of business that provides the limited liability to owners and make it comparatively easy to manage and hassle-free, as it combines the benefits both the company and partnership firm into a single form of company.
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