In today’s era, youngsters are backbone of India. With there creative minds, they have launched many successful startups. In new businesses, success rate of business is less in comparison to failure rate. To limit their liability, new business entrepreneur can create a Limited Liability Partnership (LLP) where liability of partner’s is limited to there contribution. Like Private Limited company, LLP is also incorporated with the help of minimum 2 partners, out of which at least one must of resident of India.
In this article. we will cover some FAQ’s which are commonly asked by persons while starting there business as Limited Liability Partnership (LLP)
Whether we can start our business as LLP with any name or we have to take any prior approval from any department?
Please note that, before starting any business, firstly you have to take name approval from MCA. After taking name approval from MCA, you have to file LLP Incorporation related documents with MCA in prescribed forms. The concerned MCA Officer will verify your all documents and if he is satisfied then your LLP will be registered and your will receive LLP Incorporation certificate. After that you can start your business under this LLP.
What are the documents required for Incorporation of LLP?
Required documents for LLP Incorporation are almost same that are required for Incorporation of Private Limited Company
i. PAN Card of Partners
ii. Aadhar Card/ Voter ID Card/ Driving License of Partners
iii. Latest Bank Account Statement (Not Older than 2 Months) of all partners
iv. Photo of All Partners
v. Digital Signature
vi. Appointment of Professional Like CA/ CS to complete and file all required documents with MCA
vii. Rent agreement/ NOC From landlord with latest electricity bill of registered business address of LLP
We have started an LLP 2 years back and has not filed any documents with MCA. Whether we are required to do any compliance with MCA?
Yes, an LLP is required to maintain proper books of accounts and has to submit A “Statement of Accounts and Solvency” on yearly basis with MCA within prescribed time limit.
As we have not filed any documents with MCA since its incorporation. Whether we are allowed to file these documents as of now with MCA?
Yes, you are allowed to file pending documents with MCA but you have to pay late fee in this case.
Whether there is any Limit on numbers of firms in which I can become Partner?
Yes, as per latest amendment in LLP Act, now a person can become partner in maximum 20 LLP’s
Whether Statutory Audit from Chartered Accountant is mandatory in all kinds of LLP’s?
As per LLP, Rules 2009, if the annual Turnover of LLP is less than rupees 40 Lakh or whose contribution does not exceed rupees twenty-five lakh then statutory audit is not mandatory however, designated partners are under obligation to file “Statement of Accounts and Solvency” on yearly basis with MCA within prescribed time limit.
1 Years back, I am holding the post of Designated Partner in 1 LLP and having a valid DIN Number, now I have resigned from that LLP. Whether still I am under obligation to file DIR-3 KYC with MCA?
Yes, as per law, every person holding DIN shall file DIR-3 KYC with MCA on a yearly basis. Every individual who has been allotted DIN as on or before March 31st of a financial year will be required to submit e-form DIR-3 KYC with central government on or before April 30th of the immediate next financial year.
If an LLP, commits default in MCA filing, whether it can impact the status of Director/ Designated Partner?
Yes, as per latest amendment in LLP Act, now if an LLP commits default in filing for 3 consecutive years, it can lead to Director/ designated partner under disqualification.
Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s personal experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers.
The Author “CA. Shiv Kumar Sharma” can be reached at mail –[email protected] and Mobile/Whatsapp – 9911303737/ 9716118384