cost of registering llp in india
Simplified Guide to Registering a Limited Liability Partnership (LLP) in India
Introduction:
In recent years, the concept of Limited Liability Partnership (LLP) has gained considerable popularity among entrepreneurs in India. Combining the benefits of a partnership firm and a company, an LLP provides limited liability protection to its partners while offering greater flexibility in management. Registering an LLP in India involves a straightforward process that ensures legal compliance and allows entrepreneurs to establish their business quickly and efficiently. This article will guide you through the step-by-step procedure, associated costs, and relevant considerations for registering an LLP in India.
Understanding LLP:
A Limited Liability Partnership is a unique business structure that combines elements of a traditional partnership and a private limited company. It offers limited liability protection to its partners, meaning their personal assets are safeguarded from the liabilities of the business. Additionally, an LLP allows partners to actively participate in the management of the business, unlike in a private limited company.
Step 1: Obtain a Digital Signature Certificate (DSC):
The first step in registering an LLP in India is to obtain a Digital Signature Certificate (DSC). A DSC is an electronic form of an individual’s physical signature, allowing them to sign documents digitally. It is mandatory for all partners involved in the registration process. The cost of obtaining a DSC varies depending on the certifying authorities and ranges from INR 800 to INR 2,500 per partner.
Step 2: Obtain Director Identification Number (DIN):
Next, partners need to obtain a Director Identification Number (DIN) by submitting an online application to the Ministry of Corporate Affairs (MCA). DIN is a unique identification number provided to partners or directors of companies registered in India. The application fee for obtaining a DIN is approximately INR 500.
Step 3: Name Reservation:
Choosing a suitable name for your LLP is crucial. The name should be unique, easy to remember, and without any offensive or prohibited words. After finalizing the name, an application for name reservation must be filed with the MCA. The fee for name reservation is approximately INR 1,000. It is important to note that the reservation of the proposed name is valid for 20 days.
Step 4: Drafting LLP Agreement:
The LLP Agreement is a governing document that outlines the rights, duties, and obligations of partners involved in an LLP. It also specifies the capital contribution, profit-sharing ratio, and management roles. Engaging a legal professional to draft the LLP Agreement ensures compliance with the LLP Act and proper protection of the partners’ interests.
Step 5: Filing Incorporation Documents:
Once the name is reserved and the LLP Agreement is ready, partners can proceed with filing the incorporation documents. These documents include Form FiLLiP (Form for incorporation of Limited Liability Partnership), Form 2 (Declaration by a practicing professional), and the drafted LLP Agreement. The incorporation fee varies based on the total capital contribution and ranges from INR 5,000 to INR 10,000.
Step 6: Obtaining Certificate of Incorporation:
After successfully submitting the incorporation documents, the Registrar of Companies (RoC) will scrutinize the application. If there are no discrepancies, the RoC will issue the Certificate of Incorporation. It serves as proof of the existence of the LLP and is a crucial document for opening bank accounts and obtaining various registrations.
Step 7: Obtaining PAN and TAN:
Every LLP in India must obtain a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). PAN is necessary for income tax compliance, while TAN is required to deduct and remit taxes. These can be obtained by submitting the relevant forms to the Income Tax Department.
Conclusion:
Registering an LLP in India provides entrepreneurs with a flexible and secure business structure. By adhering to the step-by-step process outlined in this article, entrepreneurs can establish their LLP while keeping the associated costs in mind. From obtaining a Digital Signature Certificate and Director Identification Number to filing incorporation documents and obtaining necessary certifications, each step ensures compliance with the law and paves the way for a successful business venture. It is always advisable to consult legal professionals for guidance and assistance during the LLP registration process.,
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This article is only published for informational purposes. Please consult your Chartered Accountant or Financial Advisor before making any important financial decisions.
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