LIMITED LIABILITY PARTNERSHIP
- A Limited Liability Partnership (LLP) is a business structure that combines features of a partnership and a corporation. It offers the flexibility of a partnership for internal management and the limited liability protection of a corporation for its partners.
- Key Characteristics:
- Limited Liability: Similar to a corporation, an LLP shields its partners’ personal assets from liability for business debts or obligations. This means partners’ personal belongings like houses or cars are generally not at risk if the LLP faces financial difficulties. Partners’ liability is typically limited to their capital contribution to the LLP.
- Pass-Through Taxation: Like a partnership, profits or losses of an LLP pass through to the individual partners and are reported on their personal income tax returns. The LLP itself does not pay separate income tax.
- Management Flexibility: LLPs offer flexibility in their internal structure. Partners can decide on profit-sharing ratios, management responsibilities, and other internal matters through a partnership agreement.
- Suited for Professionals: LLPs are a popular choice for professionals like lawyers, accountants, architects, or consultants who want to work together in a collaborative setting while limiting their personal liability.
   3. Documents required for Limited Liability Partnership
- For the Partners:
- PAN Card: A Permanent Account Number (PAN) is mandatory for all partners of the LLP.
- Address Proof: Documents like Aadhaar card, Voter ID card, Passport, or utility bills (not older than 2 months) can serve as address proof for the partners.
- For the LLP:
- Digital Signature Certificate (DSC): At least one designated partner needs a DSC to digitally sign e-forms during the registration process.
- LLP Agreement: This is a crucial document outlining the rights, responsibilities, profit-sharing ratios, capital contribution, and other vital aspects of the partnership between the LLP and its partners.
- Proof of Registered Office Address:
- Rent Agreement: A copy of the rent agreement for the LLP’s registered office premises along with relevant rent receipts.
- No Objection Certificate (NOC) from Landlord (if applicable): This is required if the registered office is leased.
