LET'S CLEAR ALL THE DOUBTS!
What are the minimum requirements to register a LLP in India?
There must be at least two individuals to be appointed as Designated Partners, out of which one must be an Indian resident. Also, there is a pre-requisite to have an address of a business in India so as to register it as a registered office for your LLP.
Is there any minimum capital requirement for LLP registration in India?
No. There is no minimum amount prescribed to form an LLP in India. It can be started with any amount of capital demanded by the business. Although there is no minimum requirement, every partner must make a contribution financially to form LLP. The amount of capital contribution is disclosed in the LLP Agreement and amount of stamp duty is decided by the total contribution amount.
How to reserve the name for a Limited Liability Partnership?
LLP name availability is as an essential part for an online LLP registration. The name of an LLP is reserved through a web based form named “LLP-RUN” (Reserve Unique Name). The partners can provide maximum of 2 names in preferential order to reserve any one. The registrar may ask to re-submit the application with different name, if names do not fall under criteria of uniqueness, relevancy or does not fulfil the necessary requirements.
What are the requirements to be a Partner/ Designated Partner for LLP formation in India?
There are no limitations in terms of citizenship or residential status to be a Partner in LLP. Therefore, the LLP Act, 2008 allows Foreign Nationals, including Foreign Companies & LLPs to incorporate LLP in India. The pre-requisite is to have at least one Designated Partner who is a resident of India. However, the person should be of the age 18 years. This is to ensure that the person in LLP is not a minor and competent enough to enter into contract. Also, the proposed Designated Partner shall have DIN.
What is Director Identification Number (DIN)? Is DPIN is required for LLP Registration?
The concept of DPIN (Designated Partner Identification Number) is replaced by DIN with respect to the LLP incorporation. Director Identification Number is a unique number assigned by the MCA to Individuals on whose behalf the application is made. This allows any individual to be Director in any Company or Designated Partner in LLP.
The application of DIN allotment is made with incorporation application in FiLLiP subject to maximum 2 DIN.
Whether a place of office is required for online LLP registration?
Yes, the partners must provide a place of business in India with the required list of documents. It can be both – a residential or commercial plot. In most cases, the address is used for the communication purpose by the MCA and other concerned authorities and is also published on its portal.
What is LLP Agreement? Does it require filing with MCA?
LLP Agreement is an agreement executed by all partners after LLP incorporation in India. The agreement prescribes all the clauses related to business, including the rights, roles, duties, and responsibilities of partners in LLP. The agreement must be filed within 30 days of the issue of a certificate of incorporation. Failure to do so will charge an additional fee of ₹ 100 per day till the date of filing.
How Stamp Duty amount is decided for LLP Agreement? Whether notarization is necessary?
The amount of capital contribution is taken into consideration in deciding the stamp duty on the LLP Agreement in India. The rate of stamp duty varies from State to State. The State Stamp Act will be applied depending on where the registered office is situated. The amount of ₹ 500 is included in our package cost. Further, the Notary on the Agreement is not a statutory requirement and not required by the MCA. A notary can be required by the bank officials but is not mandatory for incorporation of an LLP.
Can an LLP carry on more than one business activities?
Yes, a Limited Liability Partnership registered in India can carry on more than one business subject to their relevancy. The activities must be related or in the same field itself. Unrelated activities such as Interior Designing and Legal consultancy cannot be carried under same LLP. The business activities are mentioned in the agreement and must be approved from RoC.
When can I get the PAN and TAN of the LLP?
The PAN and TAN used for the LLP formation can be applied once the Certificate of Incorporation of the Limited Liability Partnership is issued. The physical copy of the PAN will be received at the Registered Office once the same is dispatched by the Income Tax Department.
Whether Audit is mandatory after LLP registration in India?
Statutory audit in case of LLP registration depends on the turnover and contribution of the LLP. If the LLP turnover exceeds ₹ 40 lacs and/or the capital contribution exceeds ₹ 25 lacs, the financial statements must be audited by an eligible statutory auditor.
What are the compliance requirements once LLP is registered?
Once online LLP registration completes, the partners must open a bank account in the name of LLP for business transactions. There is no additional requirement to be fulfilled. However, the partners must deposit the agreed amount to contribute as and when required. Furthermore, the annual compliance filing must be fulfilled every year upon LLP registration.
Whether a Body Corporate can be a Partner in the LLP?
Yes, a body corporate can be a Partner in an LLP. However, to fulfill the requirement of minimum Designated Partner, any of the two Partners or the nominee of the Body Corporate shall act as an authorized individual on behalf of the body corporate in the LLP.
Is Foreign Direct Investment (FDI) allowed in LLP?
Yes, Foreign Direct Investment (FDI) is allowed in LLP under the automatic route in the sectors allowed by the Foreign Investments Promotion Board (FIPB). However, Foreign Institutional Investors (Flls) and Foreign Venture Capital Investors (FVCIs) will not be permitted to invest in LLPs. LLPs will also not be permitted to avail External Commercial Borrowings (ECB.)