Limited Liability Partnership (LLP) is a separate legal entity which has the benefits of “Limited Liability”. It is governed and registered under the Limited Liability Partnership Act, 2008 and the rules made thereunder. Small and Medium Enterprises (SMEs) can function as LLP. LLP is suitable for service sector especially for the professionals like Company Secretaries, Chartered Accountants, Lawyers, Cost Accountants, etc.
Salient Features of LLP
Following important points should be noted:
Let us now discuss the procedure of Incorporation of LLP:
LLP can be incorporated in just four simple steps which are presented below:
The proposed Designated Partner(s) should have Digital Signature Certifcate (DSC). The Information Technology Act, 2000 (IT Act) provides for use of DSC on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically.
Acquire DSC -A licensed Certifying Authority (CA) issues the digital signature. Certifying Authority (CA) 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 CA should be registered by Role check on MCA21 portal as only then the DSC can be used for online filings of LLP eforms.
Step 2: Application for DIN or DPIN
The Designated partners of the proposed LLP are required to apply for DIN/DPIN in Form DIR-3 by attaching prescribed documents. DIN/DPIN is an eight digit numeric number allotted by the Ministry of Corporate Affairs in order to identify a particular partner of the LLP.
Note: If the proposed designated partner already having DIN/DPIN need not follow apply for another DIN/DPIN.
Step 3: Incorporation of LLP
♠ Application for reservation of name: The application for the reservation of the name of the LLP is to be filed in Form 1.
Criteria for name approval – The registrar will approve the name provided the name is not either undesirable 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.
♠ Filing of Incorporation Document and Subscribers’ Statement – Details of registered office, partners, etc has to be filed in Form 2. Following are the mandatory attachments:
Step 4: Filing of LLP Agreement
LLP shall file its LLP Agreement filed in Form 3 within 30 days of its incorporation.
Annual Compliances for LLP
LLP being a legal entity has to comply with certain annual compliances which are stated below:
Statement of Accounts & Solvency
Divided into two parts
· Part A: Statement of Solvency
· Part B: Statement of Accounts/ Statement of Income and Expenditure
Note: LLP whose annual turnover exceeds Rs. 40 lakhs or whose contribution exceeds Rs. 25 lakhs, shall get its accounts audited by a Chartered Accountant.
|30 days from end of 6 months from the financial year i.e. 30th October every year|
|Form 11||Annual Return||60 days from closure of financial year i.e. 30th May every year|
|Income Tax Return||· In case of requirement of Audit: 30th September· Incase Audit not required: 31st July|
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Disclaimer: The article has been prepared in consideration of applicable provisions of the Companies Act, 2013 and the rules made thereunder. Readers are requested to verify the same before initiating any action in order to avoid any damages or penalties. The author is not responsible for any damages caused or penalties levied by any regulator.