Limited liability partnership is a corporate structure that contains the features of both partnership firms as well Company. Limited liability Partnership (LLP) was introduced in India under the Limited Liability Partnership Act (2008). The main objective behind the introduction of limited liability partnership was to provide the flexibility of a partnership with the benefit of limited liability of a company.
There are certain compliances and procedural matters that are required to be fulfilled prior to the incorporation of a Limited Liability Partnership (LLP). Mnay other forms of companies like the private company are also required to fulfill certain compliances requirements before their incorporation. However, the overall compliance requirement for an LLP is less cumbersome, as compared to the post incorporation compliances required for a company.
The LLP must fulfill the compliances requirement to ensure the smooth incorporation of the proposed LLP.
The LLP agreement is an agreement between the members of LLP just as the partnership agreement. It plays a very crucial role in an LLP as it states the rights and duties of partner. It is mandatory for every LLP to file LLP agreement within 30 days after incorporation of an LLP. Further, LLP agreement is mandatory for all LLPs and even in the absence of a specific LLP Agreement, an LLP Agreement must be executed, specifically excluding applicability of any or all paragraphs of Schedule I (default LLP agreement).
In case any LLP fails to file LLP Agreement within 30 days of incorporation of an LLP, a heavy penalty of Rs.100 per day of default with no ceiling on the maximum fine will be levied on the LLP. Hence utmost care must be taken to ensure that the LLP agreement is properly executed and filed within the due-date.
Every LLP is required to make an application for obtaining a valid PAN card prior to its incorporation. An applicant can make a PAN application in form 49A. As soon as an application is submitted online, the PAN acknowledgment must be signed and sealed by a Designated Partner of the LLP. The signed application must then be couriered to the NSDL office for issue of PAN card. Within 10-20 days the PAN card of the LLP will be sent to the registered office address of the LLP.
By submitting the documents mentioned below the bank account for an LLP should be opened-
An important point to be noted here is that all the above documents must be signed by a Designated Partner and must have the seal of the LLP.