OPTIMUS LIMITED LIABILITY PARTNERSHIP SERVICES
Now a day’s entrepreneur is opting for Limited Liability Partnership for doing business due to its special positive features. Limited Liability Partnership (LLP) is a separate legal entity. In general law a LLP is regarded as a body corporate. It is essentially a general partnership in form, with one important distinction that the partner or investor’s liability is limited to the amount he/she has invested in the LLP. It is registered under the Limited Liability Partnership Act, 2008 and the rules made there under and governed/managed as per LLP agreement. LLP partners do not receive dividend, but enjoy direct access to the flow of income and expenses
a) The LLP has Separate Legal Entity i.e. the LLP and the partners are distinct from each other.
b) Minimum of 2 partners are required to form a LLP. However, there is no limit on the maximum number of partners.
c) No requirement of minimum capital contribution
d) Partner’s liability is limited to the extent of the agreed contribution in the LLP agreement.
BENEFITS AND ADVANTAGES OF REGISTRATION OF LLP:
a) The Liability of each partner is limited to his share as written in the Agreement filed at the time of creation of LLP as compared to Partnership Firms which have unlimited liability.
b) It has a low cost of formation and is easy to form.
c) The Partners are not liable for the acts of each other and can be held liable only for their own acts as compared to Partnerships wherein they can be held liable for the acts of their partners as well.
d) Less Restrictions and Compliance are enforced on a LLP by the Govt. as compared to the restrictions enforced on a Company.
e) As a Juristic Legal Person, a LLP can sue in its name and be sued by others. The partners are not liable to be sued for dues against the LLP.
IMPORTANT KEY POINTS:
a) All the Designated Partners of the proposed LLP should have a Designated Partner Identification Number (DPIN). The Directors Identification Number (DIN) can be used instead of DPIN if the partner is already having a DIN.
b) One of the Designated Partner of the proposed LLP should be a resident of India. In case of a LLP in which all the partners are bodies corporate or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.
INCORPORATION/REGISTRATION PROCESS FOR LIMITED LIABILITY PARTNERSHIP (LLP)
To register/incorporate a LLP it involves five basic and simple steps to incorporate a LLP.
Step 1: Acquire and Register DSC
A licensed Certifying Authority issues the digital signature. Certifying Authority means a person who has been granted a license to issue a digital signature certificate under Section 24 of the IT Act.
Register DSC: The DSC once issued by the certifying authority should be registered by Role check on MCA21 portal as only then the DSC can be used for online filings of LLP E-forms.
Step 2: Obtain Designated Partner Identification number.
Every individual intending to become designated partner in LLP has to apply for allotment for DPIN in DIR-3 by attaching prescribed documents.
Step 3: Applying for Name Approval
Application for reservation of name: The application for the reservation of the name of the LLP is to be filed in E-form 1.
Criteria for name approval: The registrar will approve the name applied for provided the name is not either undesirable in the opinion of the Central Government or that is identical with or that which too nearly resembles to the name of any existing partnership firm or a LLP or a body corporate or a trade mark registered or pending registration under the Trade Marks Act, 1999.
Step 4: Filing of Incorporation Document and Subscribers’ Statement — Details of registered office, partners, etc has to be filed in E-form 2.
Following are the mandatory attachments:
Proof of Address of registered office of the proposed LLP Subscribers’ sheet along with the consent of the Designated Partners of the proposed LLP.
Details of LLP(s) / Company(s) in which the Designated Partner is already a Director or Designated Partner, if any.
Pay the prescribed registration fee as per LLP Rules, based on the total monetary value of contribution of partners in the proposed LLP
On submission of complete documents the Registrar after satisfying himself about compliance with relevant provisions of the LLP Act will register the LLP and will issue a certificate of incorporation.
Step 5: Drafting and Filing of LLP Agreement
LLP shall file its LLP Agreement in Form 3 within 30 days of its incorporation.
Limited Liability Partnership Agreement shall contain the following particulars:
a) Name of the LLP
b) Name of Partners & Designated Partners
c) Manner of contribution
d) Profit/Loss Sharing ratio between partners
e) Rights & Duties and obligations of Partners
f) Proposed Business of LLP
g) Rules for governing the conduct of operations of LLP
DOCUMENTS/INFORMATION REQUIRED FOR INCORPORATION OF LIMITED LIABILITY PARTNERSHIP (LLP)
1. Digital Signature
Signed Original Application;
One Color Photograph of the Applicant;
Photograph should be crossed signed on the application;
Signed Copy of PAN attested by Gazetted officer/ Bank Manager;
Signed Copy of Address Proof attested by Gazetted officer/ Bank Manager;
Valid Email Address;
Mother’s/ Father's Name -in order to register the same on MCA.
2. Designated Partner Identification number (DPIN)
Signed Copy of PAN;
Signed Copy of Address Proof;
One Color Passport size Photograph;
Area of Occupation (whether Self Employed / Professional/ Homemaker/ Student/ Servicemen);
Educational Qualification Certificate;
Valid Email Address;
3. Incorporation documents
Consent of Designated Partners/Partners to act as such.
Statements by an Advocate/ CA/ CS/Cost Accountant in Practice that all requirements of LLP Act, 2008 and Rules made there under are complied with.
Proof of registered office address.
Details of LLP(s) / Company(s) in which the Designated Partner is already a Director or Designated Partner, if any
Compliance of Filing Annual Returns
1. Compliance of Filing Statement of Account and Solvency
Statement of Account and Solvency or Form-8 is a declaration by all the designated Partners of an LLP that they have sufficient solvency to pay off all of their debts that will become due in the normal course of business. Form 8 has two part :-
Part A- Statement of Solvency
Part B- Statement of Accounts, Income and Expenditure Statement.
This form has to be filed by the LLP on annual basis. It must be filed within 30 days from the end of 6 months of a financial year with the Registrar of Companies (RoC). This also required digital signatures of two Designated Partners and also needs to be certified by a CA/CS/Cost Accountant. The fee prescribed for filing Form-8 is the same as that required for registering the LLP agreement.
2. Compliance of Filing Annual Returns
An LLP is required to file Annual Returns or Form-11 with the Registrar of Companies (RoC). This is to be filed annually by the LLP just like in the case of Form-8. Form-11 contains information such as total number of Partners, contributions received by each partner as well as the summary of all the Partners, among other information. This is required to be filed within 60 days from the closure of the financial year.
The fees prescribed for filing of Form-11 is same as that of the Form-8. It can be checked by referring to Table-2 in the article. It is to be noted that an LLP is required to file Form-8 and Form-11 even when there has been no business in the LLP. The Form-11 required to be filed before winding-up the business of the LLP. An LLP is not allowed to close without filing its Annual Returns.
As mentioned above, although a private limited company is not required to file Form-11 in its annual return, it still has to file Profit and Loss, Balance Sheet and Annual returns with the RoC.
3. Compliance of Filing the Income Tax Returns
Income Tax Return is mandatory to be filed by every LLP annually. It contains all the information regarding the earning of the LLP from all sources, tax liabilities it has, taxes that have been paid for the financial year and any rebates that it receives from the government. It is mandatory for these LLPs to close their financial year on 31st March every year.
The Income Tax to be filed by an LLP has been divided into two categories:
1. LLPs whose turnover is less than INR 60 lakh
Those LLPs whose annual turnover does not exceed INR 60 lakh are required to file their Income Tax by 31st of July every year. They are not required to get their accounts audited by Chartered Accountants.
2. LLPs whose turnover is in excess of INR 60 lakh
Those LLPs whose annual turnover is in excess of INR 60 lakh are required to file their Income Tax by 30th of September every year or on the dates notified by the Income Tax Department for that year. They are required to get their books audited under the Income Tax Act.
Other services Related to Limited Liability Partnership
Addition of Partner/ Designated Partner
Removal of Partner/ Designated Partner
Change of Address
Change of Name