Simply limited liability cooperation is a cross between partnerships and corporations and is an approaching area that investors are making use of.
Limited Liability Partnership Companies are a body corporate and separate legal reality from its partners and shareholders.
Let’s understand the Limited Liability Partnership (LLP) and see the procedure for Limited Liability
Partnership Registration in Chennai.
What is a Limited Liability Partnership (LLP)
Limited Liability Partnership Companies are a body marketable and separate legal reality from its mates and shareholders. Among the partners, there should be a minimum of two designated partners, and at least one of them should be residents in India. The rights and duties of designated mates are governed by the LLP agreement. They are directly responsible for the compliance of all the vittles of the LLP Act, 2008 and vittles specified in the LLP agreement
The Law defines LLP as
“ A marketable business vehicle that enables professional expert and entrepreneurial action to combine and operate in a flexible, innovative and effective manner, furnishing benefits of limited liability while allowing its members the strictness for organizing their internal structure as a cooperation”.
Features of Limited Liability Partnership (LLP)
- It’s a separate legal reality just like companies.
- The liability of partners is limited to the donation made by the mate.
- The cost of forming an LLP is low.
- Lower compliance and regulations.
- No demand for minimum capital donation.
Step-1: Carrying Designated Partners Identification Number (DPIN/ DIN)
Step – 2 Digital Signature Certificate:Partner/ Designated mate of LLP, whose digital signatures from government honored certifying agencies. This is because all the documents for LLP incorporation are filed online and are needed to be digitally inked.
Steps – 3 Obtaining Name Blessing from MCA:Once you gain a DSC, register a name for your LLP using Form 1 and must get the blessing from the register. You can use the free name hunt installation on MCA Portal (Ministry of Corporate Affairs) before quoting the name in the form to avoid the duplicates or resemblance of any enterprises/ LLP/ body commercial/ trademark or if the name isn't undesirable in the opinion of Central Government.
Incorporate the LLP via Form 2. Give Details of the Business Conditioning proposed to be carried out by the LLP. At this stage, the LLP agreement must also be made. The form used for incorporation is FiLLiP ( Form for incorporation of Limited Liability Partnership Registration in Chennai).
Steps – 4 Incorporating LLP:
Steps – 5 Column Limited Liability Partnership (LLP) Company:The LLP Agreement must be filed as per Section 2 (o) of the LLP Act, 2008 using Form 3 on the MCA portal.
These are the process for Limited Liability Partnership Registration in Chennai.
PROS AND CONS OF LLP:
Advantages of LLP
- There's no minimal capital needed for the confirmation of LLP and LLP can be formed with the least possible capital.
- The cost of registering Limited Liability Partnership Registration in Chennai is low.
- A significant benefit of LLP Company is it doesn’t bear to get its accounts audited (if the development doesn't exceed 1 crore), whereas all company whether private or public irrespective of their share capital needed to get their accounts checked.
Disadvantages of LLP
- LLP has limited funding choices to raise finances.
- LLP isn't the ideal choice for startups who want to grow big or seek adventure capital subsidies.
- An LLP company can not issue shares to their workers.
- Though the LLP compliances are minimum, the compliances are precious by paying further penalties.
- Therefore the main purpose of the LLP in India is to introduce a form of business that provides limited liability to holders and makes it comparatively easy to manage and hassle-free, as it combines the benefits of both the company and collaboration establishment into a single form of company.