Why LLP? Advantages of Choosing LLP

✅ What is an LLP?

A Limited Liability Partnership (LLP) is a hybrid business structure that combines the advantages of both a Company and a Partnership Firm. It is governed by the Limited Liability Partnership Act, 2008.

⭐ Why Choose LLP?

• Limited Liability Protection
  The personal assets of partners are protected; liability is limited to their agreed contribution.

• Separate Legal Entity
  LLP is a separate legal entity from its partners — it can own assets, sue, and be sued in its own name.

• No Minimum Capital Requirement
  You can start an LLP with any amount of capital — even ₹10.

• Fewer Compliance Requirements
  Compared to a Private Limited Company, LLP has fewer statutory compliances like no mandatory audit up to ₹40 lakh turnover and ₹25 lakh contribution.

• Flexibility in Management
  Partners can manage the LLP directly without needing a board of directors or holding shareholder meetings.

• Perpetual Succession
  LLP continues to exist irrespective of changes in partners — death, insolvency, or retirement of a partner doesn’t affect the LLP.

• Tax Benefits
  LLPs are taxed at a flat rate of 30% on profits. No dividend distribution tax (DDT), unlike companies.

• Easy to Add/Remove Partners
  Partners can easily be changed by amending the LLP agreement — a simpler process than transferring shares.

• Lower Cost of Formation and Maintenance
  Setting up and maintaining an LLP is generally cheaper than a Private Limited Company.

• Credibility and Recognition
  LLPs are recognized by the Ministry of Corporate Affairs (MCA) and have higher credibility compared to proprietorships and partnerships.

✅ Who Should Prefer LLP?

• Professional service firms (lawyers, CAs, consultants)

• Small and medium businesses

• Startups who want flexibility + liability protection

• Businesses that don’t plan to raise external equity funding immediately

Basic Requirements

• Minimum 2 Partners (at least 1 resident in India)

• Minimum 2 Designated Partners (one must be a resident in India)

• Unique Name (not identical to existing LLPs/companies)

• Registered Office Address Proof

✅ Documents Required

📄 For Partners

• PAN Card (for Indian nationals)

• Passport (for foreign nationals)

• Identity Proof (Aadhaar/Voter ID/Driving License)

• Address Proof (Bank Statement/Electricity Bill — not older than 2 months)

• Passport Size Photographs

• Digital Signature Certificate (DSC)

• Director Identification Number (DIN) — via Form FiLLiP if not already available

📄 For LLP

• Proof of Registered Office Address:

  • Rent Agreement (if rented)

  • Ownership Proof (if owned)

  • No Objection Certificate (NOC) from owner

  • Utility Bill (Electricity/Water/Gas bill — not older than 2 months)

✅ Process Checklist

• Apply for Digital Signature Certificate (DSC)

• Reserve LLP Name (RUN-LLP Form)

• File Form FiLLiP (Incorporation Application)

  • (Includes allotment of DIN, PAN, and TAN)

• Obtain Certificate of Incorporation

• Draft LLP Agreement

• File Form LLP-3 (within 30 days after incorporation)

• Open a Current Bank Account in the LLP name

• Register for GST (if applicable)

✅ Government Fees

• Pay FiLLiP Form Filing Fees (based on capital contribution)

• Pay Stamp Duty (for LLP Agreement — state-wise variation)

• Pay DSC Charges (varies as  per market)

⚡ Post-Registration (Optional / As Applicable)

• GST Registration (if turnover > ₹20 lakh or interstate business)

• Professional Tax Registration (if applicable in your state)

• Shops & Establishment License (if required by local laws)

• MSME (Udyam) Registration (optional for benefits)

💰  Total Estimated Cost for LLP Registration

✅ Typical Example (For 2 Partners, Minimum Capital)

• DSC: ₹5,000

• RUN-LLP Form Fee: ₹200

• FiLLiP Filing Fee: ₹500

• Stamp Duty: ₹1,000 (approximate)

• Consultant Fees: ₹5,000

💳 Total Estimated Cost

• For LLP registeration is ₹11,700 to ₹12,700

✅ This includes:

• DIN allotment

• PAN and TAN application (inside FiLLiP)

• Name approval

• Incorporation certificate

• LLP Agreement filing

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