How to Form a LLP Company in India
How to Form a LLP Company in India
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Setting up a business comes with a great deal of responsibility and hard work. Taking informed decisions at every step is crucial to the success of your venture. Choosing the right entity structure for your business is one such important decision. LLPs are relatively new entities which were introduced in India in 2008. They combine the qualities of partnership firms and companies.
A LLP can have more than two partners but it must have at least two designated partners. The designated partners are directly responsible for ensuring compliance with the provisions of LLP Act, 2008 and LLP Agreement.
While registering an LLP, the partners need to submit their PAN card as primary ID proof and address proof. The date of submission of these documents should be within 30 days of incorporation. Failure to do so will lead to the imposition of a penalty fee.
Another requirement that needs to be fulfilled is the procuring of a Digital Signature Certificate (DSC). This is required as all applications and forms filed by an LLP must be digitally signed. The DSC should have a validity of 2 years. It should be obtained from a government-recognised certifying agency.
The main advantage of forming an LLP is that it is a separate legal entity from its partners. It is therefore able to enter into contracts, possess property, and bring or defend legal action. The registrar will also require a declaration that all documents submitted are true. The registrar will then issue the Certificate of Incorporation. It also protects the personal assets of the partners by only holding them liable up to the level of their capital contribution in case of insolvency or winding-up of the company.
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