Limited Liability Partnership (LLP) is a type of business structure that offers limited liability protection to its owners and combines the flexibility of a partnership with the benefits of a limited liability company. Here are the legal requirements for starting an LLP in India:
- Minimum requirements: At least two partners are required to form an LLP. There is no limit on the maximum number of partners, but the minimum designated partners should be two.
- Digital signature certificate (DSC): All designated partners must obtain a Digital Signature Certificate (DSC) from a government-approved certifying agency.
- Director Identification Number (DIN): All designated partners must obtain a unique Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA).
- Name reservation: Apply for the desired name of the LLP to the MCA. The name must be unique and comply with the guidelines issued by the MCA.
- LLP agreement: Draft an LLP agreement that defines the terms and conditions of the partnership, including the rights, duties, and obligations of the partners, profit sharing ratio, etc.
- Filing of incorporation documents: After obtaining DSC, DIN, and name approval, file the incorporation documents such as Form 2 (Incorporation Document and Subscriber’s Statement) and Form 3 (Details of LLP Agreement) with the MCA.
- Paying the Fees: The fee for registering an LLP varies depending on the amount of capital contributed. The fee must be paid through online banking.
- Certificate of Incorporation: Once the documents are verified, the MCA will issue a Certificate of Incorporation, which is conclusive proof of the formation of the LLP.
- LLP agreement filing: The LLP agreement must be filed with the MCA within 30 days of the date of incorporation.
- PAN and TAN: Apply for the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) of the LLP from the Income Tax Department.
- Opening a Bank Account: The LLP must open a bank account in its name.
- Filing Annual Returns: Every LLP must file an Annual Return with the ROC in the prescribed format within 60 days of the end of the financial year. The LLP must also file Income Tax Returns annually.
It is important to note that the above legal requirements may be subject to change from time to time, so it is always advisable to consult with a qualified professional before starting an LLP.
