LLP is a distinctive legal entity which provides advantages of limited liability of company and suppleness in partnership. In this LLP registration one partner is not responsible for the discrepancy by other partner. LLP has come to an existence in India by Limited Liability Partnership ACT, 2008. The main motto behind the need of Limited Liability Partnership to simplify the business and limits the liability of owners.

In this article, we look at the LLP formation procedure and the documents required

LLP Formation Documents Required
To register a LLP in India, the following documents are required:

1.PAN Card of the Partners
2.Address Proof of the Partners
3.Utility Bill of the proposed Registered Office of the LLP
4.No-Objection Certificate from the Landlord
5.Rental Agreement Copy between the LLP and the Landlord

The PAN Card of the Partners and the Address Proof the the Partners is required to start the LLP formation procedure. The documents pertaining to the Registered Office of the LLP can be submitted after obtaining name approval for the LLP from the Registrar of Companies.

LLP FORMATION PROCEDURE:
Limited Liability Partnership (LLP) is a newly introduced corporate entity type in India aimed at small and medium sized businesses. A LLP provides many of the benefits of a Private Limited Company while being easier to maintain compliance. Low registration fee and easy maintenance make LLP a first choice for many of the small businesses in India.

Stage 1:
Obtain Digital Signature Certificate (DSC) for the Partners:
For obtaining DIN (Director Identification Number ) for the Partners of the LLP, a Digital Signature Certificate (DSC) is required. Therefore, a Digital Signature Certificate for the proposed Partner must first be obtained. The DSC can be obtained within one day of filing of the DSC Application with Accounts Solution & Services. Digital Signatures usually have a validity of one or two years and can be used during that time for filing of Income Tax documents online or Ministry of Corporate Affairs (MCA) documents online.

Stage 2:
Obtaining Director Identification Number(DIN) for the Partners:
Once, Digital Signatures are obtained for the Partners, application for Director Identification Number (DIN) can be made. DIN registration usually happens immediately and in rare cases, additional documents must be submitted to the DIN Cell for approval of the DIN application. Further, once a DIN is obtained, there are no renewals required and each person can have only one DIN.

Stage 3:
Obtaining Name Approval:
Once two DIN’s are available, application for reservation of name can be made to the MCA. It is important for the promoters to keep in mind the LLP Naming Guidelines and suggest appropriate names for the LLP in the application, to ensure a speedy approval. Once, the application for reservation of name is submitted to the MCA, it will be processed by the Registrar of Companies (ROC) in the State of Incorporation. The processing time for name approval application differ from ROC to ROC based on the workload.

Stage 4:
Filing for Incorporation:
Once the name approval application is accepted by the MCA, a LLP name approval letter will be issued to the proposed Partners. The Partners then have 60 days to file the required incorporation documents and register the LLP. In case the LLP is not formed within 60 days of name approval letter, the approval for name for the LLP would have to be re-obtained.

While filing for formation of LLP, the documents showing possession of the registered office would be required. Once prepared, the registered office related documents along with the signed subscribers sheet must be filed with the MCA for registration of the LLP.

If the application for LLP Registration is acceptable, the Registrar would issue the incorporation certificate. Once, the incorporation certificate is issued, the LLP will be considered to be registered and application for PAN for the LLP can be made. The Partners of the LLP then have 30 days time to file the Partnership Deed of the LLP with the MCA. In case, the LLP Partnership Deed is not filed within 30 days, a fine will be applicable.

• 1.No requirement of minimum contribution As against company there is no minimum capital requirement in LLP. An LLP can be formed with least possible capital. The particulars of Minimum Capital contribution are 1. Private Company – 1,00,000; 2. Public Company – 5, 00,000; no such mandatory requirement and moreover, the contribution of a partner may consist of tangible, movable or immovable or intangible property or other benefit to the LLP.
• 2.No limit on owners of business An LLP requires a minimum 2 partners while there is no limit on the maximum number of partners ; this is in contrast to a private limited company wherein there is a restriction of not having more than 200 members.
• 3.Lower Registration Cost The cost of registering LLP is low as compared to cost of incorporating a private limited or a public limited company. An illustration can show the approximate cost involved in formation of private limited company and an LLP.
• 4.No requirement of compulsory Audit All limited companies, whether private or public, irrespective of their share capital, are required to get their accounts audited. But in case of LLP, there is no such mandatory requirement. This is perceived to be a significant compliance benefit. A Limited Liability Partnership is required to get the audit done only in the case that:- The contributions of the LLP exceeds Rs. 25 Lakhs, or The annual turnover of the LLP exceeds Rs. 40 Lakhs.
• 5.Savings from lower compliance burden Every year, there are about 8 to 10 regulatory formalities and compliances are required to be duly completed and submitted by a Private limited company whereas a Limited Liability Partnership is required to file only two, namely, the Annual Return & Statement of Accounts and Solvency.
• 6.Taxation Aspect on LLP For income tax purpose, LLP is treated on a par with partnership firms. Thus, LLP is liable for payment of income tax and share of its partners in LLP is not liable to tax. Thus no dividend distribution tax is payable. Provision of ‘deemed dividend’ under income tax law, is not applicable to LLP. Section 40(b): Interest to partners, any payment of salary, bonus, commission or remuneration allowed as deduction.
• 7.Dividend Distribution Tax (DDT) not applicable In the case of a company, if the owners to withdraw profits from company, an additional tax liability in the form of DDT @ 15% (plus surcharge & education cess) is payable by company. However, no such tax is payable in the case of LLP and profits of a LLP can be easily withdrawn by the partners.

The name of your LLP is imperative and it should attract your vendors, purchaser and shareholders. There are multiple factors which you should remember while selecting the name of your company

• Simple and Short : The name should be short and not excessive lengthy. The name should be easily remembered and pronounced by people
• Meaningful : The name of your company should be related to your business theme, it should suit your company product and brand.
• Unique : The name of LLP should be unique and it should not be the sam as the existing name in the market.
• Suffix : The name of your Limited liability partner should end with suffix of LLP
• Should not be offensive and illegal : The LLP name should not violate law and the name should not offense any religion or community. The name should not use foul word or phrases. It should not the breach the Emblems and name (prevention of improper use) Act 1950. It should not use the word "British India"