What Is LLP Registration?

LLP Registration, which is a common form of partnership, limited liability partners are shielded from obligations, liabilities, and damages from their assets. An LLP is a distinct legal and corporate entity from its partners. It is registered under the LLP Act, 2008, and has perpetual succession in all states.

Like a company, an LLP Registration (Limited Responsibility Partnership) is a corporate business form providing its members with limited responsibility. Like a partnership business, it enables partners to handle internal matters according to mutually agreed-upon terms. Partners’ obligations for any future debts incurred during the operation of the company have decreased.

Qualities of a Limited Liability Company

LLP is a Group of Business.

A Limited Liability Partnership (LLP) is a separate legal entity created under the Limited Liability Partnership Act 2008 (LLP Act), according to Section 3, and is independent of its partners.

Unending Succession

A limited liability partnership offers the advantage of having a permanent succession, unlike a general partnership firm. This means that the LLP can continue to conduct its business even if one or more partners retire, become mentally incapacitated, go bankrupt, or pass away. Furthermore, the LLP can own property and enter into agreements using its name.

Independent Legal Body

An LLP is considered a separate legal entity, just like a corporation or a business. It is solely responsible for its debts and assets. Additionally, the liability of each partner in the LLP is limited to the amount they have invested in the company. This means that the creditors of the LLP cannot hold the partners personally responsible for the company’s debts.

LLP agreement

Each partner in a Limited Liability Partnership is required to sign an LLP Agreement that outlines their responsibilities and rights. It is the responsibility of the partners to customize the agreement to meet their specific needs and preferences. If they fail to establish one, the Act will govern their respective rights and obligations.

Formal Legal Person

Legally speaking, an LLP Registration is regarded as an artificial legal person. It has all the rights of an individual and was formed by a legal process. It is a genuine entity that exists as an immortal, intangible being; hence, it cannot be considered fictional.

Typical Seal

If all of the partners use the same seal, then the LLP may have one (Section 14(c)). It is not necessary to have a seal, though. Should they decide to utilize a seal, an accountable authority must be in charge of keeping it. Only a minimum of two partners who have been designated may attach the seal.

Restricted Obligation

Every partner is the LLP’s agent for business purposes under Section 26 of the Act. A partner is not, however, another partner’s agent. All partners are protected from personal liability since each partner’s liability is capped at the amount of their agreed-upon contribution to the LLP.

Minimum and Maximum Number of Colleagues

An LLP needs to have two partners at the very least, and those two partners need to be designated partners. India should always be the home country of at least one designated partner. The number of partners in the LLP is not limited in any way.

Organization and Management of Businesses

The LLP’s partners have the power to run the company. However, the only people who can guarantee legal compliance are the selected partners.

Only Doing Business for Profit

LLPs were established expressly to carry out legal business and make money. No nonprofit or philanthropic organization may establish them.

Investigation

The Central Government may look into an LLP’s affairs. For this, they can designate a qualified authority.

Exchange of Mutual Assistance

In contrast to a partnership firm, an LLP does not hold other partners accountable for autonomous, unauthorized actions performed by one partner. Since each member acts as the LLP’s agent, the decisions made by one do not bind the other partners.

Conditions Before LLP Incorporation

• There might be a minimum of two partners (individuals or corporations).
• It is necessary to have at least two authorized partners, one of whom must be an Indian citizen.
• A certificate for digital signature is required.
• The need for an LLP name
• An LLP contract is necessary.
• There has to be a registered office set up.

Phases of LLP Incorporation

Obtain a Certificate of Digital Signature

A two-year Digital Signature Certificate (DSC) is required for applicants and LLP partners to submit online applications to the MCA. A PAN Card

Reserve the Name of LLP

• The “RUN-LLP” web form (Reserve Unique Name – Limited Liability Partnership) is the new method for reserving a unique name for an LLP.
• The former LLP Form 1 has been replaced by this simplified form, which only needs the significance of the intended name and some basic information.
• To comply with applicable name reservation laws, applicants may submit up to two names in order of preference.
• There is a chance to apply for two more names if none of the ones submitted are accepted.
• The RUN form’s government fees are determined by applying the Register Office Fees Rules.
• The MCA web account is a must for submitting the RUN form; however, the DSC (Digital Signature Certificate) and DIN (Director Identification Number) are not.
• The name of the LLP is reserved for ninety days following the approval date.

Difference between Partnership and LLP

Basis	Partnership	LLP
The governing law	Partnership Act, 1932	limited Liability Partnership Act, 2008
Registration	The Registration of Partnership is not compulsory. However, the unregistered Partnership firm cannot be sued.	The Registration of LLP is compulsory with the Registrar of Companies (ROC).
Liability	Every Partner is liable, jointly for the acts of other partners alone or for all the acts of the firm in the course of nership.	Every Partner is liable, jointly for the acts of other partners alone or for all the acts of the firm in the course of the partnership.
Legal entity	Partnership firms have no separate legal entity.	The LLP has a separate legal entity.
ITR	No returns are to be filed with the Registrar of Firms.	Every Partner is liable, jointly for the acts of other partners alone or for all the acts of the firm in the course of ownership.
Enforcement	Partnership Act provisions are different in various states as the enforcement of the act is at the State level.	The annual statement of accounts and annual return has to be filed with ROC.
Can Minor Become Partner	Minor can become a partner in Partnership.	In LLP, minors cannot become partners.

Please find below the revised modifications to the LLP (Amendment) Rules, 2023:

LLP Form No. 3 has been updated and includes additional disclosure obligations. The LLP agreement filed with the Registrar of Companies (ROC) must now disclose whether a body corporate is the nominee for a partner and provide its identification number. Additionally, any clauses related to the conversion of the LLP into a company or the LLP’s winding up must be included.

Online forms are now the only way to execute an LLP incorporation, and all LLP processes are web-based. The new online forms resemble the SPICe Plus Forms used for company creation. The inclusion of Latitude and Longitude in the Address Block is noteworthy, and the Digi Locker Database contains the directors’ information.

LLP incorporation now combines the PAN and TAN applications into one, doing away with the need for separate applications. The Certificate of Incorporation of an LLP in Form 16 is issued by the Registrar, and the Income Tax Department’s PAN and TAN are included in the same form.

LLPs can now have up to five Designated Partners (without a DIN) at the time of incorporation, and a maximum of five people may submit a Form FiLLiP application for a DPIN.

LLPs with Partner’s Contribution up to INR 50 Lakhs or sales up to INR 5 Crore are required to file a Certificate of Truthfulness and Correctness of Annual Returns. Form 8 now includes specific reporting for contingent liabilities. The Statement of Account and Solvency must now be signed on behalf of the LLP by specific professionals.