The document discusses the key benefits and advantages of forming a Limited Liability Partnership (LLP) in India. The three main points discussed are: 1) Limited liability is the foremost benefit, as the personal assets of partners are protected in cases of business failure or insolvency. Only the assets of the LLP will be used to pay off debts. 2) An LLP has a separate legal identity and status, enabling it to be taken more seriously than a proprietorship or partnership by suppliers, customers and larger organizations. 3) Forming an LLP provides advantages over other business structures like proprietorships and companies. These include lower tax rates, fewer audit requirements, lower compliance costs

1. LIMITED LIABILITY
First and foremost benefit of trading/doing business via LLP is the
limited liability conferred upon the partners. As a sole trader or
partnership business, personal assets of the proprietor or partners
can be at risk in the event of a failure of the business, but this is not
the case for an LLP. Unfortunate events like business failures are
not always under an entrepreneur's control; hence it is pivotal to
secure the personal assets of the businessman in the event of
crises.
Unlike proprietorship and partnership, if an LLP becomes
insolvent and is wound up, only the assets of the LLP are used to
clear its debts. The partners of LLP have no personal liabilities and
are not made bankrupt and are free to operate as credible
businessmen.
LEGAL ENTITY/STATUS OR RECOGNITION
An LLP is a legal entity, a juristic person established under the
Act. It has its existence separate from its partners. Corporate
entity status enables LLP to be taken more seriously than a
proprietorship/partnership status does.
Operating as a corporate entity/LLP often gives suppliers and
customers a sense of confidence in a business. Larger
organisations in particular will prefer in dealing with corporate
entities than proprietorship/partnership organisations.
Easy to attract quality workforce and achieve strategic
motivation of employees by using flexible and wide range of
management designations.
ADVANTAGES OF FORMATION OF
LIMITED LIABILITY PARTNERSHIP (LLP)
Limited Liability Partnership entities, the world wide recognized form of business
organization has now been introduced in India by way of Limited Liability Partnership Act,
2008. A Limited Liability Partnership, popularly known as LLP combines the advantages of
both the Company and Partnership into a single form of organization.
LLPs also have many advantages over proprietorships, partnerships and limited companies
as elaborated below.
TAXATION
LLPs are taxed like general partnership firms. LLPs pay an
effective tax of 30.9%. They are exempted from 10% surcharge.
LLPs tax payment is lower than that of companies, which pay a
33.99% tax on profits.
The tax will be imposed only on 40% of the LLP's income, since
the firm will be allowed to pay the balance 60% to the partners as
remuneration. This means, the partners will have to pay tax on
the amount paid to them. So, there will be no double taxation of
income.
NO AUDIT REQUIREMENT
Tax Audit is not required unless capital exceeding Rs. 25 lac or
turnover exceeding Rs. 60 lac. Unlike Limited Companies, no
requirement for payment of Corporation Tax on distribution of
income among Partners.
Unlike Private Limited Companies, LLPs are exempted from
statutory audit.
OTHER IMPORTANT ADVANTAGES
Low cost of Formation and compliances
Less statutory compliances as compared to
Private limited Companies
Less requirements as to maintenance of statutory records
Renowned and accepted form of business worldwide
No requirement of any minimum capital contribution
No restrictions as to maximum number of partners
Body corporate can be a partner of an LLP
Less Government Intervention
Easy to dissolve or wind-up
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Empowering Entrepreneurship...
PUNE BANGALORE MUMBAI CHENNAI
Tel : +91 20 6729 6500 / 6400 5120 Email : enquiry@bmcgroup.in Website : www.bmcgroup.in
Copyright © 2011-12 - All rights reserved BMC Consultancy Services Pvt. Ltd.
TM

2. Registration of Limited Liability Partnership (LLP)
Procedure/Steps involved in Registration
7
Post-Incorporation Process:
Drafting LLP Agreement by BMC
Confirmation of LLP Agreement by the Promoters
Stamping of LLP Agreement
Filing of Form 3
5
(Varies by the response time
taken by the Promoters)
Minimum 2 Partners
Minimum 2 Designated Partners
Atleast 1 of the designated partners shall be an Indian
Resident
If a body corporate is a partner, it has to nominate a
natural person as its nominee
The Partners and Designated Partners can be same person
There is no concept of share capital, but there has to be
some sort of contribution from each partner
DIN (Director Identification Number) for all the Designated
Partners
DSC (Digital Signature Certificate) for all the Designated
Partners
Minimum Requirements
An ISO 9001 : 2008 Company
Empowering Entrepreneurship...
PUNE BANGALORE MUMBAI CHENNAI
Tel : +91 20 6729 6500 / 6400 5120 Email : enquiry@bmcgroup.in Website : www.bmcgroup.in
Copyright © 2011-12 - All rights reserved BMC Consultancy Services Pvt. Ltd.
TM
Document Particulars Important Points to be considered
i) Passport size photograph
ii) Proof of Identity: (SELF ATTESTED)
PAN Card copy
(mandatory for Indian residents)
Passport copy
(mandatory for Foreign Nationals/NRIs/PIO card holders)
iii Proof of Residence: (SELF ATTESTED)
(Any one of the below)
Passport copy
Driving License copy
Election (Voter Identity) Card copy
Electricity bill
Telephone bill
Bank Account Statement
UID/Aadhar Card
Soft/Scan Copy
1. The Identity & Residence Proof must be self
attested by the respective Partners.
2. The address proof should be in the name of
the applicant and shall have Pincode/Zip
code in it.
3. Please ensure that the address proof is not
older than 40 days (In case of Telephone
bill, Bank statement & Light bill)
4. Ensure that the scan documents are clear &
visible
DIN & Digital Signature Requirements
(Please provide below mentioned documents for all the )Designated Partners
Preliminary Documentation
Discussion
Ascertaining document requirement and availability
Preparation of signing documents by BMC
Signing of the Incorporation documents by Promoters
Sending the Signed document by Promoters to BMC
between BMC Team & the Promoters of the Company:
DSC (Digital Signature Certificate)
Getting DSC for Designated Partners for digital authentication of the Incorporation documents
DIN (Director Identification Number)
Approved DIN is a pre-requisite for incorporation process
Preparation of Main Object & Search
Preparation of Main Object by BMC
The Promoters have to provide atleast 6 (Six) names in the order of priority
To make an online search of availability of names as desired by the Promoters
Confirmation of the draft main object & the final name
Name Availability
Application for Name Availability
Filing of Form 1 with the concerned ROC
Incorporation Process:
After ROC's approval for name of the Company, filing all the Incorporation documents with the ROC
Online uploading of e-Forms
Payment of Registration fees
Receiving Incorporation Certificate
5
(Varies by the response time
taken by the Promoters)
1
3
2
4
5
6
1
1
5
5
3
(Varies by the response time
taken by the Promoters)