How does an LLP work?
Limited Liability Companies are businesses in which the shareholders are not held liable for the company’s debts. Individuals/firms investing in LLPs avoid risking money on their investment. LLP partners will receive limited liability, which means they will not be held responsible for any financial consequences if the LLP doesn’t pay its debts.
The other important aspect of an LLP is that its investors do not have to be partners; any number of partners is permissible. Startups and small businesses prefer to use this kind of business entity as they can raise capital from venture capitalists, angel investors, or other private investors without disclosing sensitive information, such as business plans, financial statements, or personal assets.
How Often Should I Renew My LLP In India?
In fact, certain documents must be filed for an LLP. Every year, an LLP must file form 8 (statement of account & solvency) and form 11 (annual report). Within 60 days following the end of the financial year, the annual return should be filed. Additionally, a statement of accounts and solvency must be filed within a month following the close of a financial year. LLPs should maintain a uniform financial year ended on 31 March each year.
Annual compliance with regulatory requirements is easy for firms. To meet these demands, firms must remain diligent and disciplined. LLPs that meet Registrar of Companies (ROC) regulatory demands are often offered loans sooner or swiftly financed by investors, as they adhere to ROC demands. The LLPs that meet RoC’s annual regulatory requirements are generally kept informed of all of the Regulatory Commission’s changes throughout the year.
Indian LLP eligibility criteria
There are similar eligibility criteria to those of a regular company in India for forming an LLP.
- To form an LLP, two shareholders are required, excluding any upper limit
- A limited liability company (LLP) must have an authorised capital of at least $1000, and each of its partners contributes to it
- Indian citizens are required to be designated as partners
- The ownership of business entities can be divided between individuals, partnerships, foreign entities, and Indian residents / domestic businesses
- You can form an LLP either by registering with the state or by combining under the Indian Companies Act.
Documents required to form an LLP in India
Form for LLP registration – The LLP registration form is filed with the government and is used for LLP registration. A downloadable version of the form is available at the registrar’s website, and online registration is highly encouraged
An LLC’s Memorandum of Association (MOA) discloses information about the LLP, such as the names of the partners, their contributions, and the date of the LLP’s formation. – This document contains information such as the names of the partners, the amount contributed by each, and the date the LLP was formed.
As the name implies, this document contains the terms and conditions by which the partners of the LLP are bound. This contract covers the terms and conditions between the LLP’s partners
A LLP deed is signed by all the partners and is filed with the state government. A copy of this form is signed by all partners of the LLP and filed with the state government.
To form an LLP, you need to scan and submit a set of documents
A PAN card or passport (foreign nationals or residents)
Voter ID (Voter ID or passport) or aadhar (national ID)
A recent bank statement/moblbill/electricity/gas bill, etc.
An official passport-sized photo
This document contains a sample signature. Message from partners:
A guide to Vakilsearch’s LLP Agreement services
Our LLP agreement lawyers at Vakilsearch are the best in drafting these contracts. A Vakilsearch LLP registration package includes these elements:
- There are two DIN files for directors
- There is a LLP, MoA, and AOA
- Partnering agreements
- Company incorporation documents
- A PAN and TAN are both required
When it comes to filing your LLP annual compliances, do not forget to contact Vakilsearch’s experts. An annual LLP filing is no problem for us since we have the necessary in-depth knowledge. At a much more affordable price, we are able to fulfill all the requirements of an LLP Pricing. With over 300 business advisors and legal professionals on staff, we make the process as simple as possible.
- Steps To Opening An LLP Account
- List of LLP Misconceptions to Be Encountered
- Cost of LLP Registration in India