Limited Liability Partnership (LLP) in India
The minimum number of partners required for formation of a Limited Liability Partnership (LLP) in India are 2 (two). Out of the total partners, at least one partner should be an Indian resident in a LLP in India. Indian resident is an individual who can be considered to be a tax resident and is present in India for 182 days or more in a fiscal year.
Ministry of Corporate Affairs (MCA) is the administrative authority for registration of LLP in India.
The relationship between the partners as well as the profit and loss sharing ratio is governed by Limited Liability Partnership deed.
Requirements for incorporation
- Minimum 2 partners out of which one partner must be an Indian resident
- The partners must have at least attained the age of 18 years
- None of the partners should be disqualified under the laws in force to form a LLP
- The proposed name of the LLP should not be identical or similar to an existing company/ LLP name
- The proposed name of the LLP should not be similar to an existing pending or registered trademark
Procedure for LLP incorporation
The procedure for LLP incorporation in India involves the following steps:
- LLP name approval
- Preparation and signing of Limited Liability Partnership (LLP) deed
- Filing of relevant forms along with LLP deed with the MCA
Time frame for formation of partnership firm: The estimated time frame for LLP incorporation in India is approximately 10-15 days. However, this time frame may vary depending upon the availability of the proposed LLP name as well as backlog at the office of the Registrar of Companies (ROC).
Licenses to operate: The estimated time frame for LLP incorporation in India is approximately 10-15 days. However, this time frame may vary depending upon the availability of the proposed LLP name as well as backlog at the office of the Registrar of Companies (ROC).
Introduction of New Partner: A new partner in the Limited Liability Partnership (LLP) in India can be added by way of amendment of existing partnership and submission of the relevant form along with the supplementary Limited Liability Partnership (LLP) deed with the Ministry of Corporate Affairs (MCA).
Survival of Limited Liability Partnership (LLP) with a single partner: Yes, a Limited Liability Partnership (LLP) can survive with a single partner. If at any time, the number of partners of the Limited Liability Partnership (LLP) falls below the required minimum of 2, the only partner of the Limited Liability Partnership (LLP) during the time such Limited Liability Partnership (LLP) shall be liable personally for the obligations of the Limited Liability Partnership (LLP) if such Limited Liability Partnership (LLP) caries on the for more than 6 months till the time the number of partners of the Limited Liability Partnership (LLP) is increased to 2.
Dissolution of LLP: A Limited Liability Partnership (LLP) in India may be voluntarily wound up upon filing of a copy of the resolution with the Registrar which was approved by at least three-fourths of the total number of its partners.
Benefit of Limited Liability Partnership (LLP) over a partnership firm
The liability of the partners in a Limited Liability Partnership (LLP) is limited that is only the amount contributed by the partners to the Limited Liability Partnership (LLP). However, in case of partnership there is unlimited liability of the partners wherein personal assets of the partner may be attached by a competent court in order to meet the liabilities.
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