Question 1

What is the difference between an LLP and a general partnership?

Accepted Answer

A general partnership firm provides no separation between personal and business liability. If the partnership defaults on a debt or a partner commits negligence, all partners are personally liable their personal assets can be pursued. An LLP is a separate legal entity under the LLP Act, 2008, and each partner's liability is limited to their agreed contribution. Partners are also not liable for the acts or negligence of other partners. Additionally, an LLP can own property and enter contracts in its own name-a partnership firm cannot

Question 2

What is the difference between an LLP and a Private Limited Company?

Accepted Answer

An LLP and a Private Limited Company are both separate legal entities with limited liability. The key differences: an LLP cannot issue equity shares or raise investment from VCs or angels, while a Pvt Ltd can. An LLP cannot offer ESOPs to employees. An LLP has significantly lower compliance requirements-no mandatory statutory audit below the prescribed thresholds, no board meetings, no AGM. Profits distributed by an LLP to partners are not subject to DDT, unlike dividends in a company. For professional service firms that do not need equity investment, an LLP is typically the better fit. For growth businesses planning to raise capital, a Private Limited Company is the required structure.

Question 3

How many partners can an LLP have?

Accepted Answer

An LLP must have a minimum of 2 designated partners. There is no upper limit on the total number of partners-designated or otherwise. Additional non-designated partners can be added as agreed in the LLP Agreement.

Question 4

What is a DPIN and how is it different from a DIN?

Accepted Answer

A DPIN (Designated Partner identification Number) is the unique identification number issued to each designated partner of an LLP. It is functionally equivalent to a DIN (Director identification Number) used for company directors. Both are issued by MCA. A DPIN is allotted as part of the LLP registration process through Form FILLIP. Existing DIN holders do not need a separate OPIN- the DIN serves as the DPIN.

Question 5

Can an NRI or foreign national be a partner in an Indian LLP?

Accepted Answer

Yes. NRIs and foreign nationals can be partners in an Indian LLP, subject to the Foreign Exchange Management Act (FEMA) regulations. At least one designated partner must be a resident of India (182+ days in the previous financial year). NRI and foreign partners must obtain a DPIN and DSC. Foreign nationals must ensure their contribution into the LLP complies with applicable FDI norms for LLPS.

Question 6

Can a company be a partner in an LLP?

Accepted Answer

Yes. A registered Indian company or another LLP can be a partner in an LLP (referred to as a "body corporate" under the LLP Act). However, a corporate body cannot be a designated partner directly-it must nominate an individual to act as designated partner on its behalf. The corporate partner must provide a board resolution authorizing the partnership and nominating the individual. CorpE handles this documentation as part of the Path 2 (Corporate Body as Partner) registration process.

Question 7

What is the difference between a designated partner and a general partner in an LLP?

Accepted Answer

In an LLP, every partner is either a designated partner or a general (non-designated) partner. Designated partners are specifically responsible for all regulatory filings, compliance obligations, and statutory duties under the LLP Act. They are directly accountable to MCA for any non-compliance. A general partner participates in the LLP's operations and profits but does not carry the same statutory compliance obligations. Every LLP must have at least 2 designated partners at all times.

Question 8

What is the LLP Agreement and is it mandatory?

Accepted Answer

The LLP Agreement is a legally binding document that governs the rights, duties, profht-sharing ratios, capital contribution, decision-making procedures, partner entry and exit conditions, and operational rules of the LLP. It is mandatory-Form 3 (filling of LLP Agreement) must be submitted to MCA within 30 days of the Certificate of Incorporation being issued. If the LLP Agreement is not filed in time, the MCA prescribes default rules that may not reflect your actual partnership arrangement. CorpE drafts the LLP Agreement as part of the registration process.

Question 9

What statutory fees apply forregistering an LLP?

Accepted Answer

MCA statutory fees for LLP registration are based on the total capital contribution declared at incorporation. Stamp duty varies by state and is payable on the LLP Agreement. CorpE shows a full itemized breakdown-MCA fees, stamp duty, and service fees-before you make any payment. Our team handles all statutory fee payments to MCA on your behalf as part of the filling process.

Question 10

Canan LLP be converted into a Private Limited Company later?

Accepted Answer

Yes. An LLP can be converted into a Private Limited Company through a defined process under the Companies Act, 2013-specifically using Form URC-1 (conversion of unregistered companies). This requires all partners' consent, compliance clearances from MCA, and filing of relevant conversion documents. CorpE can assist with this conversion when you are ready to scale

Question 11

What are the annual compliance requirements for an LLP?

Accepted Answer

Every LLP must file:

Form 11 (Annual Return) - due within 60 days of the end of the financial year (i.e., by 30 May each year)

Form 8 (Statement of Accounts and Solvency) - due within 30 days of the end of 6 months of the financial year (e., by 30 October each year)

Income Tax Return- due by 31 July (if no audit required) or 30 September (if audit required)

Statutory audit is mandatory if turnover exceeds ₹40 lakhs or capital contribution exceeds 225 lakhs

CorpE's Advance plan includes all annual filings with automated reminders

Question 12

What happens if the LLP Agreement is not filed within 30 days of incorporation?

Accepted Answer

If Form 3 (LLP Agreement) is not filed within 30 days of the date of the Certificate of Incorporation, MCA imposes a daily penalty of 2100 per day until the form is filed. Additionally, in the absence of a fled LLP Agreement, the First Schedule of the LLP Act applies which sets out default rules that may not match your actual partner arrangement. CorpE fies Form 3 as part of the standard registration process.

Register Your LLP ( Limited Liability Partnership) in India — Online, Expert-Handled,Fully Guided

Register Your LLP ( Limited Liability Partnership) in India — Online, Expert-Handled,
Fully Guided