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ABOUT LIMITED LIABILITY PARTNERSHIP
Limited Liability Partnership (LLP) in India governed under Limited Liability Partnership Act 2008, LLP is a corporate business that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, as a hybrid of companies & partnerships providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.
LLPâ€™s are administered by the Registrar of Companies. Liability of partners is limited except where an Act is carried out by the LLP with intent to defraud creditors or any other person or for any fraudulent purpose A limited liability partnership is created through the state. Each state has its own set of rules and regulations that one must follow to form an LLP.
The biggest benefits of forming an LLP are the limited legal liability and the flexible management roles. Unlike general partnerships, an LLP does not expose its partners to unlimited legal liability. In other words, if someone sues the LLP, the partners will not be indefinitely liable for that amount. Their liability will be limited to the amount that they contributed to the LLP for its formation.
Another big benefit of LLPs is that it has pass-through tax such that it avoids double taxation. LLP partners will only pay their own personal income taxes, while the LLP will not be taxed as a business entity.
An LLP has extremely flexible management roles for the partners. The roles are defined in the LLP agreement that the partners draft themselves. Under the structure, each partner has the right to manage the LLP and have the right to choose how much management that they want. Thus, partners can have a very active role or even act as a silent in the LLP.
EASE OF FORMATION
State laws provide a clear structured process for forming LLPs. Thus, they are relatively easy to form. Generally, it requires the partners to fill out a registration form and file it with the local secretary of state. Nonetheless, the registration may require the partners to put in writing their roles, responsibilities, financial contributions, and debts distributions.
- Minimum 2 partners.
- Minimum 2 designated partners and at least one of them should be resident of India.
DOCUMENTS REQUIRED FOR REGISTRATION
IDENTITY AND ADDRESS PROOF
Aadhar Card, Aadhar number is now a necessity for applying for any registration in India. Also, income tax return can only be filed if the person has linked his PAN card with Aadhar number.
Address proof will be required for all directors and shareholders of the company to be incorporated. For Indian nationals, PAN is mandatory. For foreign nationals, apostilled or notarised copy of passport must be mandatorily submitted. Residence proof documents like bank statement or electricity bill should not be more than 2 months old.
All documents submitted must be valid
REGISTERED OFFICE PROOF
- Register office of all companies must be in India .If it is a Rented Property, Rent agreement and NOC from a landlord. If it is a Self-owned Property, Electricity bill or any other address proof.
- Documents submitted must be valid and not more than 2 month old.