“Get answers to your FAQs on Limited Liability Partnership (LLP) formation and compliances in India. Learn about the minimum requirements, documents needed, registration timeline, compliance obligations, audit necessity, conversion options, and consequences of non-compliance. Consult with a legal professional for personalized guidance.”
Frequently asked questions regarding Limited Liability Partnership (LLP) formation and compliances in India
Q.1 What is a Limited Liability Partnership (LLP)?
Ans. A Limited Liability Partnership (LLP) is a corporate business structure that combines the flexibility of a partnership firm with the benefits of limited liability for its partners. It is governed by the Limited Liability Partnership Act, 2008.
Q.2 What are the minimum requirements to form an LLP in India?
Ans. To form an LLP in India, you need a minimum of two partners, and at least one of them must be a resident of India. There is no restriction on the maximum number of partners.
Q.3 What documents are required to register an LLP? The following documents are typically required for LLP registration:
- LLP Agreement
- Address proof of the registered office
- Identity proof and address proof of partners
- PAN card copies of partners
- Digital signatures of partners
- Consent to act as partners
Q.4 How long does it take to register an LLP in India?
Ans. The LLP registration process usually takes around 10 to 15 working days, subject to the timely submission of all required documents and government processing time.
Q.5 What are the compliance requirements for an LLP in India?
Ans. LLPs in India have certain annual compliance requirements, including:
- Filing of Annual Return: LLPs are required to file Form 11 within 60 days of the close of the financial year.
- Filing of Financial Statements: LLPs must file Form 8 along with the Statement of Account and Solvency within 30 days from the end of six months of the financial year.
- Maintenance of Books of Accounts: LLPs must maintain proper books of accounts and financial records.
Q.6 Is it necessary to appoint an auditor for an LLP?
Ans. LLPs are not required to appoint an auditor unless their annual turnover exceeds a specified threshold (currently Rs. 40 lakhs) or their contribution exceeds a specified limit (currently Rs. 25 lakhs). If the LLP crosses these thresholds, it must get its accounts audited by a qualified chartered accountant.
Q.7 Can an LLP be converted into a private limited company or vice versa?
Ans. Yes, it is possible to convert an LLP into a private limited company or vice versa. The conversion process involves complying with certain legal requirements and obtaining the necessary approvals from the concerned authorities.
Q.8 What are the consequences of non-compliance by an LLP?
Ans. Non-compliance with the LLP regulations can lead to penalties and legal consequences. It may result in fines, prosecution, and even dissolution of the LLP.
Please note that while these answers provide general information, it is always advisable to consult with a legal professional or chartered accountant for specific guidance related to your situation and the most up-to-date regulations.
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Author is A Practicing Chartered Accountant with over 5 years of rich experience in Company Law, Audits, Accounts & taxation. She is keen in streamlining business accounts of the Company and provide Startup consultancy. She can be connected on sweta@caswetamakwana.com
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