Limited Liability Partnership Registration

Yes, there must be a place of business in India for incorporating an LLP. It can be a residential or a commercial place where the place of business may be situated. Address of such place of business is required as such any statutory notices/ letters may be communicated thereto.

Any individual or body corporate can become a partner in LLP. There is no maximum limit of number of partners. However, the designated partners can only be individuals. Among the partners of a LLP, 2 or more partners can be designated as a “Designated Partner”, out of which one must be an Indian Resident.

Provided that an individual shall not be capable of becoming the partner in LLP, if:-

• Found to be of unsound mind or
• Undischarged insolvent or
• Applied to be adjudicated as insolvent and his application is pending
• He is minor

There is no minimum capital requirement for registering an LLP. The amount of capital contribution is disclosed in the LLP Agreement and amount of stamp duty is decided by the total contribution amount. Partners can become their capital contribution in the form of cash or any tangible/ intangible assets.

A body corporate can be a Partner in an LLP. However, to fulfill the requirement of minimum Designated Partner, any of the two individuals Partners or the nominee of the Body Corporate shall act as an authorized individual on behalf of the body corporate in the LLP.

The term “Body Corporate” includes a private company, public company, one-person company, Limited Liability Partnerships, a foreign company, etc. However, HUF or Trust cannot become a partner in LLP. Similarly, a partnership firm or AOP cannot become a partner in LLP.

Yes, an existing partnership firm can be converted into LLP by complying with the provisions of clause 58 and Schedule II of the LLP Act. Form 17 needs to be filed along with Form 2 for such conversion and incorporation of LLP.

Yes, it is mandatory to execute and file the LLP Agreement in view of Section 2(0) & (q) , 22 and 23 of the Act.

As per provisions of the LLP Act, in the absence of agreement as to any matter, the mutual rights and liabilities shall be as provided for under Schedule I to the Act. Therefore, in case any LLP proposes to exclude provisions/requirements of Schedule I to the Act, it would have to enter into an LLP Agreement, specifically excluding applicability of any or all paragraphs of Schedule I.

Both the LLP and partnership firm are taxable at a flat rate of 30% + Surcharge + Cess. However, the partnership firm can take benefit of presumptive taxation scheme as prescribed u/s 44AD or 44ADA of the Income Tax Act. LLP is not covered under this scheme.

Yes, Foreign Direct Investment in equity form is allowed to the extent of 100% in LLP under automatic route in the various sectors as permitted by DIPP. However, FIIs are not allowed to invest in LLPs. LLPs will also not be permitted to avail External Commercial Borrowings (ECB)

Post incorporation, following annual compliances is to be made by an LLP:-

• Statutory Audit if turnover exceeds Rs. 40 Lakhs or Capital exceeds Rs. 25 Lakhs
• Tax Audit under Income Tax Act (if turnover exceeds limit prescribed)
• Filing of Statement of Account and Solvency (Form-8) within 30 days from the end of 6 months of the FY to which such statement relates
• Annual Return in Form-11 within 60 days from the end of financial year
• Income Tax Return