Limited Liability Partnership or LLP is an alternative corporate business that gives the benefits of limited liability of a company & flexibility of a partnership at a low compliance cost. A LLP is a partnership in which some or all partners have limited liability.
The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP. In India, the Government has notified that LLPs in same form as Partnerships i.e., tax would be levied on the LLP and the partners would be exempt from tax.
PREREQUISITES FOR INCORPORATION
£ Minimum 2 people are required to register the LLP. There is no limit for maximum partners,
£ No minimum capital requirement in case of LLP. The Stamp duty on the deed is based on the amount of the capital,
£ One designated partner of LLP must be Indian resident,
£ Name of LLP should be unique and should not be similar to any existing company, LLP or trademark.
COMPLIANCE CHECKLIST FOR LLPs AFTER INCORPORATION:
£ Filing of LLP agreement in Form 3 within 30 days of incorporation of LLP,
£ Application for PAN, TAN post incorporation,
£ Opening of Bank Account in name of LLP,
£ Audit of books of accounts of LLP & filing of tax return for every financial year.
£ MSME or Udyam/Udyog Aadhar Registration, not mandatory, but beneficial to be registered under the same,
£ Obtaining other registrations such as EPF, ESI, Professional Tax etc.,
£ GST Registration if turnover exceeds ₹40/₹20 Lakhs,
£ GST Return if registered under GST,
£ Appointment of First Auditor of the Company.