Benefits of LLP Registration and its Annual Compliances

Introduction of LLP Registration

Limited Liability Partnership (LLP) has become a most important choice of among all business owners and all other form of organization as it possesses the features of both a partnership firm and that of a company. The concept of LLP was introduced in the year 2008 by incorporating the Limited Liability Partnership Act, 2008 by the Parliament of India. LLP is that type of legal entity which is different from its partners and the existence of LLP does not affect by any change in the partners. LLP incorporation is very easy and smooth process and required only two partners to incorporate it with no maximum limit of number of partners.LLP has very lesser compliances to follow

Being a separate legal entity LLP can enter into any contract or arrangement and can purchase property in the name of LLP itself. LLP is not only popular in India but also in international platform.

LLP Registration Process

LLP Registration process is very easier, low in cost and has lesser burden of compliances in day to day operations. The following are needs to follow for registration of LLP.

Step 1: Required Class III Digital Signature Certificate (DSC)

For Registration of LLP you need to first make an application for the digital signature of the designated partners of the proposed LLP.

Step 2: Make an Application for Director Identification Number (DIN)

After obtaining the DSC You have to apply for the DIN of all the designated partners of the proposed LLP by filing the e-Form DIR-3 to the Registrar of companies.

Step 3: Application for Name Approval

LLP-RUN(Limited Liability Partnership-Reserve Unique Name) is required to filed to reserve the name of the proposed LLP. The proposed name should be unique and different from the existing LLP name. The approval of name will be grant by the registrar within 2-3 working days only of it is unique and if it is not undesirable.

Step 4: File Form for Incorporation of LLP

After receiving the name approval from ROC you have to file Form FiLLiP (Form for incorporation of Limited Liability Partnership) to the Registrar of companies to incorporate the LLP.

If the Registrar finds all the information to be true and correct, it will approve the web form and will issue a Certificate of Incorporation.

Step 5: File e-Form-3 to register Limited Liability Partnership (LLP) Agreement

After receiving the Certificate of Incorporation you have to file the e-Form 3 to register the LLP agreement which indicates the mutual rights and duties amongst the partners and also between the LLP and its partners. The e-Form -3 must be filed within 30 days of the date of incorporation. The LLP Agreement must be printed on Stamp Paper. The value of Stamp Paper is varying from state to state.

Step 6: File PAN and TAN Application:

After completing the process of registration of LLP you should apply for the TAN and PAN of the LLP

Checklist for LLP Registration

• Minimum of two partners.

• DSC for all designated partners.

• DPIN for all designated partners.

• Name of the LLP, which is not similar to any existing LLP or trademark.

• Capital contribution by the partners of the LLP.

• LLP Agreement between the partners.

• Proof of registered office of the LLP.

Documents Required for LLP Registration

For registration of LLP there are certain documents which are required to start the process of registration. The documents are required in two parts:

A. Documents of Partners

• Self attested copy of PAN Card/ ID Proof of Partners:

• Address Proof of Partners : ID, Passport, Driver’s license or Aadhar Card

• Residence Proof of Partners – Latest bank statement, telephone bill, mobile bill, electricity bill or gas bill which should not be more than 2-3 months old and must contain the name of partner same as mentioned in the PAN.

• Email ID and mobile number of all the partners

• Passport size photograph of Partners preferably on white background.

• Passport (in case of Foreign Nationals/ NRIs) –. Passport must be notarized by the relevant authorities in the country of such foreign nationals and NRI, or Indian Embassy situated in that country can also sign the documents.

• Duly signed Consent of Designated Partners in Form 9

• A subscriber sheet duly attested by a practicing professional agent

B. Documents of LLP

• Proof of Registered Office Address such as Electricity Bill, Water Bill or telephone bill etc. (not older than 2 months) submitted within 30 days of its incorporation.

• NOC and Rent Agreement in case the premise of registered office is rented.

Benefits of LLP Registration

LLP has many benefits and features which makes it most popular business form especially in the service sectors. Since the concept of LLP was introduced in India, many large corporate entities are move towards LLP. Small Enterprises prefer to LLP for their business as it has lesser compliance and also cost saving. The LLP has following benefits which makes it different from other organization.

• It has a separate legal entity just like companies.

• An LLP can sue and be sued in its own name.

• The liability of each partner is limited to the contribution made by the partner and they are not liable for any loss in the LLP.

• The cost of forming an LLP is low.

• Less compliance and regulations.

• The LLP needs to file only Form-11 (Annual Return) and Form-8 (Statement of Accounts and Solvency).

• No requirement of minimum capital contribution.

• There are only two minimum partners required incorporating an LLP is two and there should be a minimum of two individual designated and one of which should be resident in India.

• There is no upper limit on the maximum number of partners of LLP.

• The rights and duties of designated partners are specified in the LLP agreement and they are directly responsible for the compliance of all the provisions of the LLP Act and the provisions of the LLP agreement.

Annual Compliances of LLP

Every LLP is required to comply Annual compliances every year the details of which are as follows:

Every LLP is required file annual returns in Form 11 and statement of accounts and Solvency in Form -11 every year with the Registrar of Companies in compliance of the provisions of the LLP Act, 2008. The forms has to be signed by the designated partners and practicing professionals.

• Form 8 (Statement of Accounts and Solvency)

LLPs shall file Form-8 with ROC within 30 days from the end of the six months of the financial year i.e by 30th October of the financial year. LLP has file their assets, liabilities, profit & loss of the Financial year in Form-8.

• Form 11 (Statement of Annual Return)

LLPs shall file Form – 11 with ROC within 60 days of from the end of financial year i.e. by 30th May of the next financial year. LLP has file in Form-11 the brief of the management affairs, details of partners and their contribution.

• Penal provisions:

If the LLP has not file the Form 8 and Form 11 before the due date, then the LLP is required to pay the additional fee of Rs.100.00 per day till the date of filing.

• Audit of the Accounts:

The LLP is required to get their accounts audited by Chartered Accountant if it fulfils the following conditions:

If the annual turnover exceeds Rs.40 lakhs or where the contribution exceeds Rs.25 lakh

B. Filing Income Tax Returns of the Limited Liability Partnership

Being a separate legal entity, an LLP shall file the Income Tax Returns in each financial year. Generally the due date of Income Tax Return is 31st July of the financial year for the Individual and legal entities, but in case the accounts are audited then the due date is 30th September for a year. LLPs should file their income tax return in Form ITR 5 at the Income tax portal.

The LLPs are required to file the NIL Income Tax Return even though the LLP has not done any business in that year.

Annual Filing for the F.Y. 2020-21

LLP which incorporated on or before 30th September 2020 shall file their financials for Financial Year 20-21 before the due dates. But the LLPs which incorporated on or after 1st October 2020 to 31st March 2021 can file their financials next year by preparing the statement of 18 months

How can Compliance Calendar Help?

Compliance Calendar LLP has a team of Experienced Professionals who can help you in Registration of LLP and manage each and every compliances of your LLP Business anywhere in India. We will prepare all the documents required to register a LLP. We make the process of LLP Registration very easy and with our team of experts.

For LLP Registration in India, Compliance Calendar is one of the most popular consulting entity as it helps in whole the process of Registration of LLP. We will help you to ensure that all your compliance related deadlines are handled in consistent, timely and thorough manner we can be your true guide to the proper Compliance. For Register your LLP you are required to provide us the desirable LLP name and we will check its availability for its registration. We will provide to you a complete checklist for the documents which are required to register a LLP. If you have any queries on LLP Registration and its Compliances, email us to info@ccoffice.in or WhatsApp/Call at 9988424211