Limited Liability Partnership (LLP) was introduced in India by way of the Limited Liability Partnership Act, 2008. LLP stands for Limited Liability Partnership. It is an alternative corporate business form which offers the benefits of limited liability to the partners at low compliance costs. It also allows the partners to organize their internal structure like a traditional partnership. A limited liability partnership is a legal entity, liable for the full extent of its assets. The liability of the partners, however, is limited. Hence, LLP is a hybrid between a company and a partnership. But it should not be confused with limited liability company.
ACT: LLPs are controlled by LLP Act, 2008 whereas Partnership firms are controlled by Indian Partnership Act, 1932.
Governing Authority: LLPs are governed by the Ministry of Corporate Affairs in India, formed by Central Government. Partnership firms are registered with the Registrar of Firms, controlled by the respective State Government in which the firm is registered.
Protection of duty of partner: In Limited Liability Partnership the liablity of a partner is limited to his Act only where as there is no such concept exist in case of partnership firm.
Number of Partners: In both the case minimum two member is required for registration of a new entity but after registration in case of a LLP we can increase number of member without any limited but in case of Partnership Firm we can’t do the same.
ACT: LLPs are controlled by LLP Act, 2008 whereas Partnership firms are controlled by Indian Partnership Act, 1932.
Governing Authority: LLPs are governed by the Ministry of Corporate Affairs in India, formed by Central Government. Partnership firms are registered with the Registrar of Firms, controlled by the respective State Government in which the firm is registered.
Protection of duty of partner: In Limited Liability Partnership the liablity of a partner is limited to his Act only where as there is no such concept exist in case of partnership firm.
Number of Partners: In both the case minimum two member is required for registration of a new entity but after registration in case of a LLP we can increase number of member without any limited but in case of Partnership Firm we can’t do the same.
Private limited company registration process and the LLP registration process are very similar with some differences in the documents and forms filed for incorporation.
Cost: The cost for the incorporation of a private limited company or an LLP is the same.
Features: Both LLP and Private Limited Company offer many of the same features. LLP and Private Limited Company are both separate legal entities and have assets and liabilities that are separate from that of the promoters. LLP and Private Limited Company are both transferable, though a Private Limited Company offers more flexibility when it comes to transferring or sharing of ownership. LLP and Private Limited Company both have perennial life, unless and otherwise closed by the promoters or competent authority.
Fundraising: A private limited company can raise funds from Angel Investors, Private Equity Funds, Venture Capitalists, banks and NBFCs. An LLP can raise funds from Partners, Banks and NBFCs.
Post changes to FDI regulations on 10th, November 2015, 100% FDI in LLP is permitted under the automatic route. In most sectors, 100% FDI in LLP is allowed through the automatic route, and there are no FDI-linked performance conditions. In addition, LLPs will also be permitted to make downstream investment in another company or LLP in sectors in which 100% FDI is allowed under the automatic route. Therefore, FDI in LLP is now permitted, and NRIs or Foreign Nationals can start or invest in an LLP.
LLP Registration by us:
We are here at Edge legal to help you to start a new business you just have to submit your query and we will get back to you generally incorporation of a LLP take 15 to 20 days’ time, it may be increase or decrease depends upon the circumstances and time taken by regulatory authority.
Post-Incorporation LLP Compliances
Once your LLP get registered you need to do following are compliances in each financial year. We can provide you the best professional guidance and all the below mentioned service including GST registration in just Rs. 9999/- , we will also file your GST return but this will cost Extra as per your turnover.
Income Tax Return: LLPs must file income tax return using Form ITR 5. Form ITR 5 can be filed online through the income tax website using the digital signature of the designated partner.
MCA Annual Return: LLP Form 11 is due on or before 30th of May each year. Form 11 contains details of the number of partners, total number of partners, total contribution received by all partners, details of body corporate as partners and summary of partners.
In addition to LLP Form 11, Form 8 must be filed within 30 days from the end of 6 months of the financial year along with some prescribed fee. Hence, LLP Form 8 would be due on or before 30th October of each financial year.
