Limited liability partnership (LLP) is a popular, reliable, and well-known business structure in India, as customers, suppliers, and several other commercial institutions, prefer to deal with an LLP instead of a proprietorship or a normal partnership firm due to the structured rules of compliance, laid out by the LLP Act, 2008 and the Ministry of Corporate Affairs that govern an LLP and promote reliability, transparency and safeguards the interest of stakeholders.
LLP structure involves fewer statutory and regulatory compliances when compared to those prescribed for a Private Limited Company; and hence, has become a preferred form of organizational structure amongst entrepreneurs who want to enjoy the benefits of both a partnership firm and a company in an effective and an efficient manner.
SSI, suggests an LLP structure for small-scale businesses who aim to save time as well as the costs of regulatory compliances that are much higher for a Private Limited Company in India.
Other salient features of an LLP:
- The liability of each partner is limited to their contribution made
In other words, if an LLP is unable to repay its loans & other liabilities then the charge against the partners is limited to their investments & profits made in business; Whereas, their personal assets remain safe from being attached for recovery of debts.
- LLPs' have perpetual succession
The legal existence of an LLP is not dependent on the existence of its partners. i.e. An LLP is a separate legal entity and its operations can continue even if all its partners cease to exist.
- No requirements for minimum capital contribution
LLPs can be incorporated without any initial capital contributions or with a sum as low as one thousand Indian rupees; This relaxation helps the entrepreneurs who do not have much capital to start a business by saving the initial cash flows required for setting up a legal entity.
Bundled services provided by SSI, in the package for Incorporating an LLP in India are:
- Application for DIN/ DPIN for Designated Partners via form DIR-3
- Acquiring & registering Digital Signature Certificates (DSC) for up to 2 partners
- Filing of E-forms with Ministry of Corporate Affairs (MCA) for Incorporation of LLP
- Drafting of LLP Deed
- Payment of Government fees & duty on initial Capital Contribution of up to one lakh rupees.
- Notarization of LLP Deed for filing it before MCA
- PAN registration
- TAN registration
- GST registration
- Current account opening assistance with Banks