How to set up LLP in Cochin
Limited Liability Partnership (LLP) is a corporate business vehicle that offers both the benefits of an organization and the flexibility of the partner company, i.e. its members have the flexibility to manage their internal structure jointly based on limited liability and mutual agreement. Limited Liability Partnerships registration, a globally recognized business entity now introduced in India by the Limited Liability Partnership Act, 2008.
Documents required for LLP registration
- Passport size photograph
- Copy of PAN card
- Copy of electricity bill
- Sale deed
- Copy of Aadhar Card
- Address proof
- Copy of rent agreement
Process of Limited Liability Partnership registration in Cochin
- The first step is to find and reserve a name for the LLP. Filing of Partner E-Form 1 designated to check LLP name availability.
- The name will be reserved by the Ministry for the applicant for a period of 90 days. If the applicant does not merge the LLP within 90 days, it will be deemed rejected and made available to others.
- The applicant will file e-Form 2 to include the new LLP by specifying all the details of the nominated and nominated partners.
- Individual consent is required for all partners, including those designated for the specific role.
- Following the above procedure, the applicant will file e-Form 3 for the LLP agreement within 30 days of the LLP merger. Under Section 23 of the Limited Liability Partnership Act 2008, the LLP agreement is mandatory.
Merits of Limited Liability Partnership registration in Cochin
Limited Liability Partnership registration has its own advantages compared to the traditional partnership and Pvt Ltd, as it is the better of the two structures in a good viable package. It addresses various challenges faced by the entrepreneur when using a traditional partnership structure. There are many differences between private limited and limited liability, where we only cover the benefits of an LLP: –
Limited Liability: – The biggest advantage of doing business as an LLP is that the liability of each partner is limited to his / her contribution / share, and the partners may be at risk when the owner’s personal assets or business fails, contrary to the sole proprietor or traditional partnership. Therefore this mode helps the partners to get rid of personal responsibilities. Unlike ownership and partnership, if an LLP goes bankrupt and is injured, only the LLP’s assets will be used to pay off its debts. The partners of the LLP have no personal obligations and are not bankrupt and are free to act as trusted businessmen.
No Minimum Capital Assistance Required: – An LLP registration is done with set up without a minimum capital contribution, contrary to the requirements of private limited companies. 1 lakh. Small entrepreneurs / start-ups can also contribute in instalments that enable them to reap these benefits.
Special Legal Scope: –
LLP registration has its exclusive presence from its partners. The LLP may and may not claim its own existence. Due to its status, the entry and exit of partners does not affect the LLP. Because it has different stakeholders (i.e. suppliers, customers, etc.), it provides flexibility when concluding and signing legal agreements. Also, working as a corporate entity / LLP often instils confidence in the business for suppliers and customers. Especially large companies prefer to deal with corporate entities rather than proprietary / partner firms, consult a corporate lawyer to ensure your structure is your entity tailored to your business needs.
Board Meetings: – The Company is not subject to partners to hold 4 mandatory board meetings as required by law once a year. Partners can meet depending on their convenience or need. Partners can specify the details & schedule of meetings in the LLP agreement.
There is no limit on business owners: – LLP requires at least 2 partners, but there is no limit to the maximum number of partners. This is in contrast to a private limited company, which has a limit of no more than 200 members.
Mandatory audit is not required:
– All limited companies, private or public, are required to audit their accounts, irrespective of their share capital. But in the case of LLP, there is no such mandatory requirement. It was realized that this was a significant consent benefit. In this case only a limited liability partnership is required to complete the audit:
i. LLP contribution Rs. 25 lakhs, or
ii. LLP has an annual turnover of Rs. 40 lakhs.
Low cost of construction: – The cost of registering an LLP is less than the cost of incorporating a private limited or public limited company.
Dividend Distribution Tax (DDT) does not apply: – In the case of a company, if the owners withdraw profits from the company, the company has to pay an additional tax liability of @ 15% (plus Surcharge & Education Cess) in the form of DDT. However, in the case of an LLP no such tax is payable and the profits of the LLP can be easily withdrawn by the partners.
The Ministry of Corporate Affairs (MCA) has extended the deadline for companies’ Fresh Start Scheme (CFSS) and LLP Settlement Scheme till the end of this year. The two schemes ended on Wednesday with the aim of improving compliance with regulatory filings. The MCA was introduced in March to enable companies and LLPs to be better off if there is any delay in filing and to reduce the burden of additional fees and make them fully compliant. The ministry has extended the scheme till December 31 to ease the time to file forms related to the creation or change of charges as per the Companies Act. Companies are required to file charges or amendments with the MCA when a company secures its assets for a loan. The scheme also ended on Wednesday from June.
It targeted LLPs with a paid-up capital of Rs 1 lakh, but the late fee reached Rs 5 lakh or more. The relief scheme for LLPs is applicable for overdue filing from October 31, 2019. Amnesty is payable on payments of Rs. 10 per day late from the specified date and only an additional fee of up to Rs. 5000 per document will be levied.