Limited liability partnership registration in Chennai also called LLP registration is a hybrid form of business structure leveraging the lesser tax compliance advantage of a traditional partnership firm and the limited liability feature of a private limited company. If we remove the disadvantages of a partnership firm and the disadvantages of a private limited company, what we get is a limited liability partnership business structure.
What is LLP registration ?
Limited liability partnership firm introduced in India in year 2009 by LLP act 2008, and it is also registered with ministry of corporate affairs like pvt Ltd. The only form of business in India with more benefits and low compliance, low cost of setup and maintenance. The concept of limited liability and the power of ownership only to partners is the biggest advantage of LLP. Limited liability partnership is the best suitable for service sector such as software, technology, professional services, etc.
How to register LLP in Chennai ?
Limited liability registration in Chennai is applied with the Ministry of corporate affairs in online mode. The proposed LLP name is applied with the registrar for name approval. Once the name is approved, the limited liability firm registration application is submitted using digital signature of LLP partners. The registrar will approve the application submitted and issue a LLP registration certificate.
Documents required for LLP registration
- Pan card of partners
- ID proof : Aadhaar card/ voter id / driving license/ passport of partners
- Address proof : bank statement / mobile bill / Telephone bill, electricity bill.
- Passport size photo of partners
- Rental agreement after approval of LLP name
- Supporting documents
Steps to Register
LLP registration consultation
LLP name application
Digital signature and DPIN application
Preparation and submission of documents
Approval of LLP and issue of certificate
other registration and compliance
Why should we register LLP in Chennai?
- LLP registration is considered as a hybrid form of business incorporation with limited liability benefits of a private limited company and ownership rights of a traditional partnership firm
- LLP is considered the same as a normal partnership firm in terms of income tax rules, tax rates, etc. No additional compliance is required for LLP in the Income tax act.
- The disadvantage of heavy compliance, documentation, periodical return filing, and annual general meeting is not required for limited liability partnership firm
- It enjoys separate legal entity status and thus has a greater advantage of representing itself as a separate person through its designated partners.
- Low cost of filing LLP forms in the Ministry of corporate affairs
- There is no minimum capital required to register of LLP in India
- Unlike a partnership where it will be automatically dissolved in case of minimum no of partners falls below 2, in the case of LLP time limit of 6 months is provided to increase the limit to 2 partners.
- The compulsory audit is not required
- Improved credit facility compared to traditional partnership firms due to compliances required under LLP Act and monitoring by MCA.
What is the compliance required after LLP registration?
- As a first step after LLP registration, LLP should file an LLP agreement with the registrar within 30 days of approval of the LLP registration certificate. Failing to file an LLP agreement within this time will result in a penalty of Rs.100 for every day of delay in filing an LLP deed.
- As LLP is a definite and proper separate legal entity, a current account with the bank shall be opened for transactions of the firm
- Deposit of contribution in the bank account of LLP, amount of contribution of each partner shall be deposited in a designated bank account in cash if his contribution is less than Rs.20,000, if his/her contribution is Rs.20,000 to more the same shall be deposited through cheque or online transfer from the bank account.
- Maintenance of books of accounts, vouchers, ledgers, and other accounting requirements is mandatory for LLP. Presumptive taxation is not applicable to LLP, so the choice of declaration of profits as the minimum percentage of turnover is not applicable to LLP.
- TDS provisions are applicable to LLP irrespective of turnover limit hence, if the firm is liable to deduct TDS for any quarter it is liable to file a TDS return for the quarter and deposit TDS deducted every month to the government account within the due date. Failure to file a TDS return within due will result in a penalty of Rs.200 per day.
- Filing of income tax return is mandatory irrespective of the turnover of the business or activity of the business
- GST registration is mandatory only if turnover crosses the threshold limit
- LLP should file annual returns, statements of solvency, and other documents every year within 6 months from the end of the financial year.
From Auditor DESKLimited liability partnership registration is a good form of business for businesses with third-party risks, if you are business has a high value of third-party risk and still if you want a low level of statutory compliance you can opt for LLP instead of a private limited company.
Frequently Asked Questions
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Some of the businesses for which LLP is suggested
- Software consulting and related services
- Professional services
- Legal services
- Civil Engineers
- Technical consulting
- Wholesale trading
- Authorized Distributor
- Authorized Dealer
- Training centers
- Financial services