A limited liability partnership which is also populary known as LLP is a Business Entity that is distinct from its Partners and/or Designated Partners and enjoys the benefit of continuous succession and limited financial obligation. It should have a minimum of 2 Designated Partners. The word ‘Limited Liability  denotes that the Liability of the Designated Partners and normal Partners is restricted. It is also one of the most popular type of business structure for those who wants to enjoy the benefits of incorporated entity with normal Partnership Firm.

1. Who are Designated Partner and how many Designated Partners are in Limited Liability Partnership (LLP)?

• Minimum no. of DP required are 2 out of which 1 shall be Indian Resident.

• Any person can be a DP of the LLP including family members.

• Director Identification No. (DIN) and Digital Signature Certificate (DSC) are required to be a DP of the LLP.

• DP are the managers and they are responsible for day to day functioning of the LLP.

• DP can also contribute to capital of the LLP.

2. What is the difference between Partners and Designated Partners in Limited Liability Partnership (LLP)?

• There is no such minimum requirement for a Partner.

• DP and Partners can be the same.

• Partners only contribute to capital of the LLP and does not take active participation in the day to day functioning of LLP, hence they are not responsible or liable for any activities of the LLP.

3. What is minimum Capital required to start the Limited Liability Partnership (LLP)?

• There is no such requirement for minimum capital contribution, hence the LLP can be formed with the capital contribution starting from INR 1.

4. What is Registered Office of the Limited Liability Partnership (LLP)?:

• Any place can be made as the registered office of the LLP even the residential place can be used as the registered office of the LLP.

5. Who is the Registering Authority of the Limited Liability Partnership (LLP)?:

• Ministry of Corporate Affairs

6. What are the documents required for the formation of Limited Liability Partnership (LLP)?

 > Proof of Registered office address (Conveyance/ Lease deed/Rent Agreement/Maintenance Bill)

 > Copy of the utility bills of the registered office (Electricity Bill/Telephone Bill not older than two months)

    Designated Partners / Partners

 > PAN Mandatory- Indian National / Passport – Foreign National – Self Attested

 > Proof of Identity – Voter Id/Passport/Driving License – Self Attested

 > Proof of Address (Electricity Bill/Bank Statement/Telephone Bill/Mobile Bill not older than 2 months) – Self Attested

1. Obtain DSC (Digital Signature Certificate)
2. Application for the Name approval through LLP-RUN on MCA Portal
3. Prepare e-form FILLIP (allotment of DIN, reservation of name and Incorporation)
4. Filing of e-form FILLIP with require attachment with RoC (Registrar of Companies)
5. Drafting of Partnership Agreement
6. File Partnership Agreement with e-form 3 within 30 days of incorporation
7. Verification of documents / forms by RoC
8. Issue of Certificate of Incorporation by RoC

Advantages

1.  CONVENIENT
2. NO MINIMUM CAPITAL REQUIREMENT
3. NO LIMIT ON OWNERS OF BUSINESS
4. LOWER REGISTRATION COST
5. NO REQUIREMENT OF COMPULSORY AUDIT
6. LESS COMPLIANCE

Disadvantages

 1.REGULATED FORM OF BUSINESS
2.AUDIT AND FINANCIAL DISCLOSURE
3.LONG CLOSING PROCEEDINGS
4.TRANSFER OF INTEREST
5.AMENDMENT IN LLP AGREEMENT
6.LACK OF RECOGNITION