Limited Liability Partnership Registrations – Requirements and Advantages
Introduction
LLP is a type of companies’ incorporation meaning Limited Liability Partnership (LLP). This type of incorporation is mostly applicable for law firms, accounting firms, architecture firms, etc., and other business areas where partnership expertise is preferred to a business. Every LLP should have at least two partners and there is no maximum limit for the number of partners.
The LLP is legally considered as a body corporate and is a legal person that has perpetual succession. As the name suggests, the partners will have limited liability and one partner will not be responsible for the negligence/malpractice of the other(s). Further, LLP is responsible for its own assets and binds to protect the member’s personal assets from the liabilities of the business, which means that they are not fully responsible for the business’ debts or liabilities
Requirements for forming an LLP:
Eligibility Criteria: Ensure if the business is applicable under LLP since it is only applicable to specific businesses where the association of professionals is required like lawyers, accountants, doctors, etc. Any LLP must have at least one Indian national as a partner
Business name: Names must be chosen in a way that they are not similar to the already existing names and are not undesirable to the government(s). One must ensure the availability of the name for registration through simple searches in trademarks, domain names, a list of companies available in the MCA (Ministry Of Corporate Affairs) portal, and a simple google search. Once a name is finalized they should be suffixed with LLP and the same should be reserved for further processing through Central Registration Centre.
LLP Agreement: Though not a mandate document, it is always advisable to have the LLP agreement in place that has the details of duties and roles of the partners, governing principles, rules and regulations, capital contributions (if any), profit-loss sharing, etc.
Registration of LLP with MCA: LLP should be registered with the registrar of companies in the jurisdiction where the LLP would be situated by submitting suitable forms and fees.
Other details: (i) Names, personal / contact details of each of the partners, (ii) address of the place of business, and (iii) the details of the designated member for communicating/dealing with the MCA, regulatory bodies, and other government organizations associated with the functioning of the LLP.
Advantages of LLP:
- Being a legal person, LLP has perpetual succession i.e. existence after insolvency, death of the partners, etc. and can own the properties in its name
- Liability of the partners, investors, and the creditors is limited and they are not liable for other partner’s misconducts
- Being a legal person, an LLP can be sued and has to undergo any legal process based on the requirements.
- Single taxation system i.e. income from business can be divided as the income of the individual partners and the tax can be filed as individual tax returns
- Protects the partners’ personal assets from the liabilities of the business
IPLF and LLP Registration:
Our team comprises highly skilled and trained legal / accounting professionals to assist in the negotiation and drafting of various types of contracts including LLP agreements, and registering your businesses as per the needs including LLP registration and protecting your business interests.
Author: Govindhaswamy Srinivasan, a Principal Associate – Patents at Khurana & Khurana, Advocates, and IP Attorneys. In case of any queries please contact/write back to us at support@ipandlegalfilings.com
