LLP: A corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.
LLP, a legal form available world-wide is now introduced in India and is governed by the Limited Liability Partnership Act 2008, with effect from April 1, 2009. LLP combines the advantages of ease of running a Partnership and separate legal entity status and limited liability aspect of a Company.
- LLP is a separate legal entity separate from its partners, can own assets in its name, sue and be sued.
- Unlike corporate shareholders, the partners have the right to manage the business directly
- One partner is not responsible or liable for another partner’s misconduct or negligence.
- Minimum of 2 partners and no maximum.
- Should be ‘for profit’ business.
- Perpetual succession.
- The rights and duties of partners in LLP, will be governed by the agreement between partners and the partners have the flexibility to devise the agreement as per their choice. The duties and obligations of Designated Partners shall be as provided in the law.
- Liability of the partners is limited to the extent of his contribution in the LLP. No exposure of personal assets of the partner, except in cases of fraud.
- LLP shall maintain annual accounts. However, audit of the accounts is required only if the contribution exceeds Rs. 25 lakhs or annual turnover exceeds Rs.40 lakhs.
A LLP is indeed advantageous because of comparatively lower cost of formation, lesser compliance requirements, easy to manage and run and also easy to wind-up and dissolve, no requirement of minimum capital contributions, partners are not liable for the acts of the other partners and importantly no minimum alternate tax (as of date). But, LLP cannot raise money from the public.
Details of Fee
1. For registration of Limited Liability Partnership including conversion of a firm or a private
company or an unlisted public company into Limited Liability Partnership:
(a) Limited Liability Partnership whose contribution does not exceed Rs. 1 lakh Rs. 500/-
(b) Limited Liability Partnership whose contribution exceeds Rs. 1 lakh but does not exceed Rs. 5 lakhs Rs. 2000/-
(c) Limited Liability Partnership whose contribution exceeds Rs. 5 lakhs but does not exceed Rs. 10 lakhs Rs. 4000/-
(d) Limited Liability Partnership whose contribution exceeds Rs. 10 lakh Rs. 5000/-
2. The difference between the fees payable on the increased slab of contribution and the fees paid on the preceding slab of contribution shall be paid through Form 3.
3. For filing, registering or recording any document, form, statement, notice, Statement of Accounts and Solvency, annual return and an application along with the Statement for conversion
of a firm or a private company or an unlisted public company into LLP by this Act or by these
rules required or authorized to be filed, registered or recorded:
(a) Limited Liability Partnership whose contribution does not exceed Rs. 1 lakh Rs. 50/-
(b) Limited Liability Partnership whose contribution exceeds Rs. 1 lakh but does not exceed Rs. 5 lakhs Rs. 100/-
(c) Limited Liability Partnership whose contribution exceeds Rs. 5 lakhs but does not exceed Rs. 10 lakhs Rs. 150/-
(d) Limited Liability Partnership whose contribution exceeds Rs. 10 lakh Rs. 200/-
4. Fee for any application other than application for conversion of a firm or a private company or an unlisted public company into LLP shall be as under:-
(a) An application for reservation of name u/s 16 Rs. 200/-
(b) An application for direction to change the name u/s 18 Rs. 10000/-
(c) Application for reservation of name under Rule 18(3) Rs. 10,000/-
(d) Application for renewal of name under rule 18(3) Rs. 5000/-
(e) Application for obtaining DPIN under rule 10(5) Rs.100/-
5. Fee for inspection of documents or for obtaining certified copy thereof shall be as under:-
(a) For inspection of documents of an LLP under section 36 Rs. 50/-
(b) For Copy or extract of any document under section 36 to be certified by Registrar Rs. 5/- per page or fractional part thereof.
6. Fee for filing any form or a Statement of Account and Solvency or a notice or a document by foreign limited liability partnership.
(a) For filing a document under rule 34(1) Rs.5000/-
(b) Any other form or Statement of Account and Solvency or notice or document Rs.1000/-
Certifying Authorities (CA) has been granted a license to issue a digital signature certificate under Section 24 of the Indian IT-Act 2000. One can procure Class 2 or 3 certificates from any of thefollowing certifying authorities.
For further details please visit the Govenment of India website for LLP