LLP registration came into existence in India with the introduction of Partnership Act, 2008. LLP or limited liability partnership is a form of business entity that provides limited liability to the owners of the company. However, it is an ideal firm for small scale businesses.
In this article, we will make you aware about the various benefits of LLP Registration along with the document requirements of LLP registration in India.
What are Advantages of registering under a Limited Liability Partnership?
A limited liability partnership company has various benefits that are given as follows:
- Perpetual succession:
Verbal meaning of perpetual succession is ‘never-ending’. By getting an LLP registration you can make your company exist forever. An LLP stays unaffected by the death or departure of any of its member or partner. Hence a limited liability partnership company continues to be in existence irrespective of the changes in its partners.
- Easy transferability:
Another amazing benefit of an LLP is that it easily allows you to transfer its ownership to another person by just introducing them as a new partner of the LLP Company.
- Separate legal entity:
An LLP is juristic person and a legal entity established under the Partnership Act, 2008. Due to this LLP has various benefits including own a property, wide legal capacity and also incur debts.
- Do not require audits:
Yes, you heard it right. You don’t require an audit to for a LLP registration if your annual turnover is less than RS 40 lakhs and less than Rs. 25 lakhs of capital contribution.
- Limited liability:
The biggest advantage of an LLP is the limited liability for its partners. Unlike partnerships and proprietorship the liability of all the members of the LLP company in respect to the LLP debts is limited. That means there is no risk to the personal assets of the directors if the company goes bankrupt.
What are the requirements for LLP Registration?
Here is the list of documents you will require to get an LLP Registration:
- Passport size photographs of all the proposed partners of the company.
- A copy of PAN card of all the partners of the respective company.
- Aadhar card or voter id copy of all the partners.
- In case of a rented property: a copy of rental agreement and a No Objection Certificate from the landlord.
- In case of owned property: a copy of Property Papers
Minimum requirements for the registration of limited Liability Partnership Company:
- DPIN (Designated Partner Identification Number) for all the partners of the company.
- At least one partner of the company must be an Indian Resident.
- A company must have a minimum number of two partners.
- No capital Requirement.
Conclusion
An LLP is an ideal structure for the small scale business and startups who want to have minimal regulatory compliance formalities. The main advantage of a LLP over other partnership firms is that none of the partner of the company is responsible for the negligence or misconduct of the guilty partner. Other than it also provides limited liability protection to the members of the company. For more information regarding LLP Registration or to get an LLP registration, you can contact Swarit Advisors on ho@swaritadvisors.com or can call us on +919821399320
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