Hello Seniors,
I have a query, please help me out - how to register an LLP-based company, and in that company, how can we give salaries through an account? What is the process for that? Is there any act to register the company, and which place do I need to go for this? I am from Hyderabad, and the company is located in Ongole district. I need to take care of all HR activities. Four people have been taken on lease for 5 years in that company.
From India, Mumbai
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I have a query, please help me out - how to register an LLP-based company, and in that company, how can we give salaries through an account? What is the process for that? Is there any act to register the company, and which place do I need to go for this? I am from Hyderabad, and the company is located in Ongole district. I need to take care of all HR activities. Four people have been taken on lease for 5 years in that company.
From India, Mumbai
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Dear Kokila,
LLP Overview
LLP refers to a Limited Liability Partnership and is governed by the Limited Liability Partnership Act 2008. A Limited Liability Partnership provides the advantage of limited liability to its owners while requiring minimal maintenance. The directors of a private limited company have limited liability to creditors. In case of default, banks/creditors can only sell the company’s assets and not the personal assets of directors.
Documents Required for LLP Registration
1. Copy of PAN Card of partners
2. Passport size photograph of partners
3. Copy of Aadhaar Card/Voter identity card
4. Copy of Rent agreement (If rented property)
5. Electricity/Water bill (Business Place)
6. Copy of Property papers (If owned property)
7. Landlord NOC
Minimum Requirements for LLP Registration
1. Minimum 2 Partners
2. No Capital Requirement
3. At least one Designated Partner as an Indian Resident
4. DPIN for all Partners
Steps Involved in LLP Registration
1. Application of DSC & DPIN: The first step is obtaining a Digital Signature Certificate (DSC) and Designated Partner Identification Number (DPIN) for the proposed Partners of the LLP. Within 5 to 7 working days, DPIN and DSC can be obtained for the proposed Partners. If the partners already have DSC and DPIN, this step can be skipped.
2. Name approval: A minimum of one and a maximum of six proposed names are required to be given to the Ministry of Corporate Affairs (MCA). Subject to availability, naming guidelines, and MCA processing time, this takes 5 to 7 working days.
3. MOA & AOA submission: Once the name is approved, draft the Memorandum of Association and Articles of Association. Both MOA and AOA are filed with the MCA with the subscription statement.
4. Get incorporation certificate: Incorporation documents can be submitted to the MCA along with an application for incorporation. MCA usually approves the application for incorporation in 5 to 7 days, subject to their processing time. The incorporation certificate is proof that the company has been created. It also includes your CIN number.
5. Apply for PAN, TAN, and Bank account: Then you need to apply for PAN and TAN. PAN and TAN are received in 7 working days. After this, you can submit the Incorporation certificate, MOA, AOA, and PAN with the bank to open your bank account.
Frequently Asked Questions
1. What is the minimum number of Partners required to start a Limited Liability Partnership?
At least two partners are required for LLP registration. The maximum partners can be 200. If you are the sole owner, you can register as a One Person Company.
2. Who can become a partner in LLP?
Any individual/organization can become a partner in LLP, including foreigners/NRIs. However, the individual must be 18+ in terms of age and should have a valid PAN card.
3. How much money do I need to invest upfront in starting the business?
You need to have a bank account with a minimum balance, which could be as little as Rs. 5000. You need not invest any more capital in starting the business. You needn’t even deposit this amount to the bank. You can also show that the capital has been utilized as the pre-incorporation expenses of LLP, e.g., LLP registration expenses. You can also show this capital has been infused in the form of assets such as computers, etc.
4. Can NRIs/Foreign Nationals be a Designated Partner in LLP?
Yes, but only after they have been assigned a DIN/DPIN. However, at least one designated partner in LLP must be a Resident of India. In fact, the foreign director can also be a majority shareholder in the company.
5. Can I register the LLP at my home address?
Yes, you can register your LLP at your residential address. It is perfectly legal to start the company at your home or in your garage. The MCA team typically doesn’t visit your office. You just have to provide your home address proof such as a rent agreement or electricity bill.
6. Can a salaried working person also become a partner in an LLP?
Yes, as a salaried person, you can become a partner in an LLP. You need to check your employment agreement if that allows for such provisions. In most cases, employers are comfortable with the fact that their employee is a director in another company.
7. Can I convert my Limited Liability Partnership (LLP) into a Private Limited company?
No, you can’t convert your LLP into a Private Limited Company as it is not MCA. Both the LLP Act, 2008, and the Companies Act, 2013 don’t have any provisions on the conversion of LLP into a private limited company. However, if you want to expand your business, you can register a new Private Limited Company with the same name as that of the LLP. The LLP company just needs to issue a no-objection certificate.
Generally, LLP Registration can take 15-30 days.
Regards,
Amit
From India, Surat
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144LLP Overview
LLP refers to a Limited Liability Partnership and is governed by the Limited Liability Partnership Act 2008. A Limited Liability Partnership provides the advantage of limited liability to its owners while requiring minimal maintenance. The directors of a private limited company have limited liability to creditors. In case of default, banks/creditors can only sell the company’s assets and not the personal assets of directors.
Documents Required for LLP Registration
1. Copy of PAN Card of partners
2. Passport size photograph of partners
3. Copy of Aadhaar Card/Voter identity card
4. Copy of Rent agreement (If rented property)
5. Electricity/Water bill (Business Place)
6. Copy of Property papers (If owned property)
7. Landlord NOC
Minimum Requirements for LLP Registration
1. Minimum 2 Partners
2. No Capital Requirement
3. At least one Designated Partner as an Indian Resident
4. DPIN for all Partners
Steps Involved in LLP Registration
1. Application of DSC & DPIN: The first step is obtaining a Digital Signature Certificate (DSC) and Designated Partner Identification Number (DPIN) for the proposed Partners of the LLP. Within 5 to 7 working days, DPIN and DSC can be obtained for the proposed Partners. If the partners already have DSC and DPIN, this step can be skipped.
2. Name approval: A minimum of one and a maximum of six proposed names are required to be given to the Ministry of Corporate Affairs (MCA). Subject to availability, naming guidelines, and MCA processing time, this takes 5 to 7 working days.
3. MOA & AOA submission: Once the name is approved, draft the Memorandum of Association and Articles of Association. Both MOA and AOA are filed with the MCA with the subscription statement.
4. Get incorporation certificate: Incorporation documents can be submitted to the MCA along with an application for incorporation. MCA usually approves the application for incorporation in 5 to 7 days, subject to their processing time. The incorporation certificate is proof that the company has been created. It also includes your CIN number.
5. Apply for PAN, TAN, and Bank account: Then you need to apply for PAN and TAN. PAN and TAN are received in 7 working days. After this, you can submit the Incorporation certificate, MOA, AOA, and PAN with the bank to open your bank account.
Frequently Asked Questions
1. What is the minimum number of Partners required to start a Limited Liability Partnership?
At least two partners are required for LLP registration. The maximum partners can be 200. If you are the sole owner, you can register as a One Person Company.
2. Who can become a partner in LLP?
Any individual/organization can become a partner in LLP, including foreigners/NRIs. However, the individual must be 18+ in terms of age and should have a valid PAN card.
3. How much money do I need to invest upfront in starting the business?
You need to have a bank account with a minimum balance, which could be as little as Rs. 5000. You need not invest any more capital in starting the business. You needn’t even deposit this amount to the bank. You can also show that the capital has been utilized as the pre-incorporation expenses of LLP, e.g., LLP registration expenses. You can also show this capital has been infused in the form of assets such as computers, etc.
4. Can NRIs/Foreign Nationals be a Designated Partner in LLP?
Yes, but only after they have been assigned a DIN/DPIN. However, at least one designated partner in LLP must be a Resident of India. In fact, the foreign director can also be a majority shareholder in the company.
5. Can I register the LLP at my home address?
Yes, you can register your LLP at your residential address. It is perfectly legal to start the company at your home or in your garage. The MCA team typically doesn’t visit your office. You just have to provide your home address proof such as a rent agreement or electricity bill.
6. Can a salaried working person also become a partner in an LLP?
Yes, as a salaried person, you can become a partner in an LLP. You need to check your employment agreement if that allows for such provisions. In most cases, employers are comfortable with the fact that their employee is a director in another company.
7. Can I convert my Limited Liability Partnership (LLP) into a Private Limited company?
No, you can’t convert your LLP into a Private Limited Company as it is not MCA. Both the LLP Act, 2008, and the Companies Act, 2013 don’t have any provisions on the conversion of LLP into a private limited company. However, if you want to expand your business, you can register a new Private Limited Company with the same name as that of the LLP. The LLP company just needs to issue a no-objection certificate.
Generally, LLP Registration can take 15-30 days.
Regards,
Amit
From India, Surat
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