Limited Liability Partnerships, or LLPs, have now become a popular choice in recent years. If you own a business, you've probably heard this word at some point. Let's go through the definition of a Limited Liability Partnership in case you don't know what it is.
What is the idea of a Limited Liability Partnership (LLP)?
The Limited Liability Partnership Act was introduced in India in 2008. All the Limited Liability Partnerships in India are regulated under this Act.
Limited Liability Partnerships (LLP) is a well-balanced arrangement that provides the perks of a traditional partnership while also minimizing participants' liability. Every business owner looks for limited liabilities in companies that aren’t customarily feasible in a conventional proprietorship. However, in an LLP an individual partner can enjoy the restricted liability as well as some of the benefits of traditional partnerships.
Limited Liability Partnership in India is commonly created by two or more people who are ready to share ownership and responsibility for the company's activities. An LLP agreement details the rules and clauses that govern the duties of its members.
Most entrepreneurs prefer LLPs since they do not have to use their own resources to fund their business debts. Furthermore, they are not held accountable for the malfeasance of any other partner. LLPs are a promising substitute for general partnerships, which carry the threat of huge penalties.
As of the end of June, 10,954 organizations had been registered as LLP with a consolidated capital of Rs 1,318.89 crore.
Limited Liability Partnerships (LLP) vs Private Limited Companies
- Nature Of the Organisation
- A limited liability partnership (LLP) is a cross between a corporation and a partnership. It is a hybrid structure of the partnership law. On the contrary, a private limited company is an organization that is commonly owned by a few business shareholders or by any non-government organization.
- Number Of Partnerships
- To form an LLP, a minimum of 2 members is compulsory. There is no legal limit to the maximum number of partners in an LLP.
- In a company, the minimum number of members is two, and the maximum is 200.
- Minimum Capital Requirement
- Both in an LLP and a private limited company, there is no minimum capital requirement.
- Abiding Rules
- The privileges, responsibilities, and revenue percentages of an LLP's stakeholders are regulated by the mutually accepted agreement. This contract is made between partners or even between partners and the LLP as a separate legal entity.
- However, a company abides by the AOA(Article of Association) and MOA(Memorandum of Association).
- An LLP includes many lower compliances against the higher compliances in private limited companies.
- Structure Of Tax
- LLPs are a sort of enterprise that uniquely pays taxes. The owners split the profit proportionately but do not pay company taxes. The tax structure is thus easier and includes no dividend distribution tax.
- Companies have complex tax structures. Dividends paid by companies, on the other hand, are taxed at a rate of 20.36 percent.
LLP registration in Pune can be complicated sometimes. You probably have a million questions about what to do or how it works. We're here to answer all your inquiries.
If you wish to register your business as a Limited liability Partnership in Pune and are unsure how to do so, contact our specialists.
LLP Registration in Pune Offers Many Advantages for Your Startup. What Are They?
- No Maximum Limit on Partnerships
In an LLP, the minimum number of partners is two. However, there isn’t any bar on the upper limits of the number of partnerships in Limited Liability Partnerships. So, every time a new partner joins an LLP he brings his existing business with him. However, a company can have a minimum of two shareholders and a maximum of 200.
- Lower Registration Costs
The registration fees for establishing an LLP are substantially lower than the costs of establishing a company or business organization. Furthermore, an LLP requires less compliance. There are only two yearly statements that must be filed: the Annual Return and a Statement of Accounts and Solvency. We may be the best choice if you're looking for a company that offers affordable LLP registration fees in Pune.
- Highly Convenient
It is far easier to form an LLP than it is to set up a company. Besides, the legal complexities involved in forming a company might be overwhelming at times.
Furthermore, the LLP's partners are only partially accountable. Their liability is related to the value of cash they invest. They are not accountable for any commercial damages. Furthermore, they cannot be held liable for any crime committed by other members.
- There are no capital contribution requirements
We make every effort to keep LLP registration fees in Pune as low as possible. You can form an LLP without having to invest any money. They can be founded simply by financial contributions offered by the LLP shareholders.
- LLP operates as a separate legal entity
Separate from its partners, the Limited Liability Partnership has its own legal identity, so it can sue and be sued independently. LLP is also responsible for its assets. The LLP partners aren’t credible for the LLP dues.
Process Of LLP Registration in Pune
- Apply for your Director Identification Number(DIN)
Make certain that you are well-versed in all facets of an LLP. To apply for a DIN, you must have at least two members, both of whom must be of Indian ancestry. There is no requirement for a capital contribution. Both members (or the number of members enrolled) must apply for the DIN separately.
- Submit the Necessary Documents
The documents must now be submitted to the Ministry of Corporate Affairs (MCA) via the official web portal. The documentation includes each partner's residential proof, PAN card numbers, one colored image of each, and at least one business piece of evidence in India.
- Application for Digital Signature Certificate(DSC)
DSC is a mandatory requirement for all business partners with a DIN to attach to forms for submission. It may be required in the future or by the Registrar of Companies for the registration of an LLP in Pune.
- Apply for your LLP’s name
The next step is to register your LLP's name. Make certain that no other corporate organization has previously registered this name for themselves. If this is the case, your name will be rejected owing to copyright violation. Following the submission of the name request form, they will conduct a comprehensive inspection to guarantee that no one has filed a similar name as property rights for registering a company with the Ministry of Economy.
- Incorporation Documents Should Be Filled Out Complete filling up the incorporation documents correctly with the Registrar of Companies via the MCA portal (ROC). If any errors were made during this process, there is yet another one-time opportunity to edit errors for a cost.
- Receive your Certificate
You will now receive your certificate, which will serve as proof of your LLP registration in Pune.
- Open your Current Account
A bank account in the name of the firm to whom the certificate of incorporation is granted should be formed. The current account will be utilized for any necessary financial activities.
- Draft LLP Agreement to be Submitted to ROC
Following the submission of the Certificate of Incorporation with the ACRA (Accounting and Corporate Regulatory Authority), the LLP Contract must be lodged with the ROC office via their portal.
For LLP registration in Pune, you need to be comfortable with the necessary legal requirements. If you want to register your startup as an LLP in Pune and you are wondering how to do the same, get in touch with our experts.
We started small, with only a handful of customers. Today, we are having several clients nationwide and across several industrial sectors. Customers trust us a lot regarding their LLP registration in India and consultation needs.
Since 2012, statistical studies reveal that the number of LLPs has grown nearly 6 times while the number of companies established during the same period is even less than two times. It’s quite clear what and why the present business owners are favoring.
If you are thinking about creating a Limited Liability Partnership, you should obtain expert counsel. The prevailing legal provisions will vary in various ways, thus it is critical to be informed of these differences before agreeing.