Overview of LLP registration in Bangalore, Karnataka

The Companies Amendment in 2013 which replaced the previous Companies Act 1956 on 29th August 2013, introduced some novel concepts intending to encourage entrepreneurship & facilitate “Ease of doing business” & instill the values of corporate governance among business entities in India.

Accordingly, one of the key changes introduced by the Companies Act 2013 included the concept of “LLP or Limited Liability Partnerships “in Bangalore, Karnataka, although the concept of LLP was introduced in the year 2009 through the Limited Liability Partnership Act 2008 & relevant rules and the same was an instant success with start-ups and professional services.

An LLP is an alternative business structure that combines the benefits of the other business structure such as operational flexibility of a partnership firm, whereas a body corporate structure, perpetual succession & limited liability of a company, while eliminating the drawbacks of the existing business structure.

LLPs are known to offer a balanced framework to businesses to ensure minimal compliances & more focus on business growth activities, and could even have minimal compliances to follow to receive foreign direct investments from countries outside India.

 

LLP registration in Karnataka

Located in the South-Western region of India, Karnataka was formed in 1956 with the passage of the ‘State Reorganisation Act.’ Earlier the state was known as Mysore, but in 1973 it was renamed Karnataka. The bordering states of Karnataka are Goa, Maharashtra, Telangana, Andhra Pradesh, Tamil Nadu, and Kerala. Demographically Karnataka is the 8th largest state by population, with a population density of 319 people per square kilometer.

The sex ratio of the state is 973 females per thousand males. Kannad is the state’s official language, and the other minority languages spoken in Karnataka are Urdu, Konkani, Marathi, Tullu, Tamil, Telugu, Malayalam, Kodava, and Beary. Even there are some villages in Karnataka where Sanskrit is primarily spoken. The word Karnataka is derived from the Kannada words Karu and Nadu, meaning elevated land; some people also interpret the meaning of Karu Nadu as Black region. The state is called the black region because of the black cotton soil found in the Bayalu Seeme region of Karnataka.

The economy of Karnataka is the sixth-largest economy in India, and it ranks 9th in the state human development index of India. The state is the manufacturing hub for some of the largest public sector industries in India, including – Hindustan Aeronautics Limited, National Aerospace Laboratories, Bharat Earth Movers Limited, Bharat Heavy Electricals Limited, etc. – these public sector industries are based in Bangalore.

Besides this, many of India’s premier science and technology research centers, including – the Central Powers Research Institute, the Indian Space Research Organisation, Bharat Electronics Limited, and Central Food Technological Research Institute, are also headquartered in Karnataka. The majority of the silk industry in India also has its base in Karnataka. India is agricultural land and Karnataka is no exception in this case. Agriculture-related activities are the primary sources of income in Karnataka, as nearly 56% of the workforce in Karnataka is directly or indirectly engaged in agriculture or agriculture-related activities.

Capital- Bangalore

 

The startup ecosystem in Karnataka

With the sixth-largest economy in India, Karnataka has one of the most mature startup ecosystems in India; that’s why Bengaluru, situated in Karnataka, is known as the startup capital of India. The state government has taken multiple initiatives to encourage startups and build a conducive startup ecosystem in the state. Karnataka was the top performer in the startup ranking exercise 2018 conducted by the department of industrial policy and promotion.

In November 2015, the Government of Karnataka launched its startup policy. The key features of the policy are as follows: –

According to the startup policy of Karnataka, the government will assist in setting up TBIs in institutions of high learning.

The state government would support the private sector so that they can set up incubation centers and accelerators or expand existing facilities and operations.

According to the startup policy of the Karnataka government, the state shall maintain a list of common instrumentation facilities present across the state.

To encourage and set up a robust startup ecosystem, the state government provides funding in the form of a Grant-in-aid to innovators. The funding will be up to 50 lakh rupees and will be provided to the innovators and businessmen who need early-stage funding.

According to the startup policy of Karnataka, the new age incubation scheme that is currently in execution at engineering colleges will be expanded to all the professional & post-graduate institutions in tier-two cities.

Startup ideas in Karnataka

Food delivery business

Food delivery services are highly required in the urban areas of Karnataka. The state has a large working population that orders online food, thus expanding the scope of food delivery services. If you are good at managing people and organizing the workforce, then you should try your hands at food delivery services in Karnataka.

 

Translation agency

Karnataka is popularly known as the byte-basket of the country for attracting huge foreign investors. For sealing business deals, the investors meet with the companies, but language is a barrier. The inflow of investors for business deals has opened various opportunities for multilingual people. Translators are required to overcome the language barrier; thus, opening a translation agency is an ideal business idea in Karnataka.

 

Organic food business

People are getting more health-conscious daily, and they are looking for more organic foods and items, thus expanding the scope of the organic food business. To establish an organic food business in Karnataka, you need to grow good quality organic food and sell them to the suppliers. Organic farming is different from normal agriculture, so you have to invest extra money and effort in setting up an organic food business. Once this business is set up, you will make huge profits because nowadays, people are getting more health-conscious and do not mind spending extra money on organic food.

 

Food processing business

The state is predicted to become the leading food processing hub in India. The food processing industry of Karnataka is undoubtedly on the threshold of demand-led growth in the country. Karnataka has ten agro-climatic zones, and its land topography is also suitable for agriculture, making it one of India’s most agriculturally diverse states. More agriculture means a rise in demand for food processing units; thus, establishing a food processing business in Karnataka can help you make huge profits.

 

Disposable plates business 

Today everything is made of plastic. Setting up disposable cutlery and plates built from banana leaves is a good business idea in Karnataka. Honestly, disposable cutleries and containers are part of our daily life; we use them regularly. Plastic cups and plates are heavily used; we use them even after knowing they harm our environment. People do want to bring a change, but they don’t know the alternative to plastic.

Karnataka has a lot of banana trees, which means that the raw material is locally available for setting up disposable plates and cutlery made from banana leaves. By setting up this business, you will make a profit and contribute to a cleaner and greener environment. This business needs a considerable amount of investment, but once it is established, it will help you make huge profits.

 

Salient Features of LLP registered in Bangalore, Karnataka

  • An LLP is an alternative business structure that has characteristics similar to that of a company & a partnership firm.
  • Like a private company, an LLP needs at least two partners to be incorporated out of which there should be at least two designated partners. But, unlike a company, there is no upper limit on the maximum number of partners in an LLP whereas the maximum number of shareholders is up to 200.
  • The liability of each partner is limited to the agreed contribution in an LLP as there is no requirement of minimum capital contribution.
  • The respective rights & liabilities of the partners in an LLP are determined in pursuance of an LLP Agreement.
  • The designated partners are responsible directly for compliance with all the provisions of the LLP Act 2008 and provisions specified in the LLP agreement

 

Pre-Requisites for LLP Registration in Bangalore, Karnataka

i. Partners in LLP

For the purposes of LLP Registration, there must at least be a minimum of two partners, out of which at least two will be named as designated partners, and at least one designated partner should be a resident in India. Such partners/designated partners should possess a Director Identification Number (DIN) issued by the Ministry of Corporate Affairs. Only individuals can be designated as partners in an LLP.

Other than an individual, a body corporate can also become a partner (but not a designated partner) in the LLP by nominating a representative to act & attend meetings on its behalf.

ii. Name of the Proposed LLP

The name of a Limited Liability Partnership (LLP) shall compulsorily include the words ‘LLP’ which is the acronym for ‘Limited Liability Partnership. The proposed name is required to be approved by the Registrar of Companies on the MCA portal. The name of the LLP must be in line with the main objects of the LLP.

iii. Registered Office Address

Every proposed LLP must have a registered office address for statutory communication purposes before starting the process of incorporation. In case the property is rented, then a copy of an address proof with a No-Objection Letter for use of address as the Registered Office of LLP shall also be compulsorily attached with the documents.

iv. For a Legal Object

It is also necessary to ensure that the purposes of the proposed LLP must be for any legal business activities and not for any illegal object. For this, it is highly advisable to identify the main objects of the LLP in a particular line of business.

v. Digital Signature Certificate (DSC)

For the purpose of online registration of an LLP, it shall be necessary to file the documents online which shall be authenticated by using a Digital Signature Certificate of the Designated Partner from the Certifying Authority in India or MCA.

vi. Certificate of Compliance

Further, for the purposes of LLP registration, it shall be compulsory for every prospective LLP to obtain a certificate of compliance from a professional such as a Company Secretary/ Chartered Account/Cost Accountant who shall issue a certificate of compliance that all the requirements related to the incorporation of a Limited Liability Partnership (LLP) have been fulfilled and are genuine in nature.

 

Process of LLP Registration in Bangalore, Karnataka

Process of LLP Registration in Bangalore, KarnatakaThe process of LLP registration is a simple & completely online process that is administered by the Ministry of Corporate Affairs (MCA) following the completion of the process & filling the documents electronically and online verification, the Registrar issues a digitally-signed Certificate of Incorporation (COI) for the prospective LLP.

Process of LLP Registration Online in Bangalore, Karnataka

i. Acquire a Digital Signature Certificate (DSC) in Bangalore, Karnataka

In the first step, the LLP is required to make an application for a digital signature certificate which is mandatorily required for the purpose of e-filling of e-forms & ensuring a digital signature certificate to ensure the safety & authenticity of information submitted on the MCA portal.

ii. Make Application for DPIN (Designated Partner Identification Number) Allotment in Bangalore, Karnataka

For the purpose of registration of an LLP, it shall be necessary to apply a Designated Partner Allotment Number, which is a unique identification number allotted to every proposed LLP for the facilitation of the registration process.

iii. New User Registration on the Portal in Bangalore, Karnataka

Next, for new user registration, the user must create a login id & password after logging in on the MCA portal and clicking “New user” registration.

iv. Fill out the form for Name Reservation & Incorporation in Bangalore, Karnataka

Further, the proposed LLP must have two-three proposed names ready for the purposes of incorporation after carefully choosing a name that is not already taken or is too closely related to the names of any existing entity.

For this, the applicant entity must file an e-form RUN (Reserve Unique Name) to check the availability of the name and afford protection so that the name once reserved could not be taken by any other applicant for a period of sixty days. However, for approval, the name should not be undesirable or doesn’t resemble any existing business or any Government organization/department in the view of the Central Government.

Once the RUN form is approved and it is protected, the applicant shall move to the next step which is filling & submitting the e-form name FiLLiP for LLP Registration online along with the required information & attachments.

v. Prepare and Submit LLP Deed in Bangalore, Karnataka

An LLP Deed is a legally binding agreement entered between partners concerning their rights & obligations in pursuance of an LLP, which is similar to a partnership Deed in the case of a partnership firm. The particulars of LLP Deed include matters like the object of formation of the LLP, shares in profits & losses, interest on loans, dispute resolution in case of conflicts, etc.

Thus, after filling out forms online, the applicant LLP is required to draft an LLP Deed and submit it online. The format for LLP Deed has been prescribed under e-form no. Form 3, which must be filed within 30 days from the date of the incorporation.

vi. Apply for Your PAN, TAN, & Bank Account in Bangalore, Karnataka

Once the steps mentioned above are completed, submit the FiLLiP form online and once registration approval is granted and a Certificate of Incorporation is provided, the applicant LLP shall be required to obtain PAN no., TAN number & a bank account for the LLP.

 

Time Involved in Registration in Bangalore, Karnataka

The whole procedure from obtaining DSC to Filing Form 3 may take anywhere around 7-10 days depending upon the departmental approval and revert from the respective department.

 

Documents Required for LLP registration in Bangalore, Karnataka

Required Documents for LLP Registration in Bangalore, KarnatakaFollowing documents should be available in a scanned format to be attached with the form of registration of LLP in Bangalore, Karnataka-

Documents of Prospective Partners in Bangalore, Karnataka

i. Proof of Identification for Partners of LLP- All the partners are required to provide their PAN at the time of registering LLP. PAN card is primarily the ID proof required.

ii. Proof of Residence of Partner- Each partner in the LLP needs to submit a valid proof of residence which could be any one document out of Voter’s ID/ Passport, Driver’s license / Aadhaar Card. But, the name & other details as per address proof and PAN card should be exactly the same. In case details such as spelling of the name, father’s name or date of birth is different in the proof of residence & PAN card, it should be corrected before submission to RoC.

iii. Copy of utility Bills- Further, a copy of utility bills such as the latest bank statement, telephone bill, mobile bill, electricity bill, or gas bill should be submitted as residence proof. iv. Passport-sized photographs preferably on white background.

iv. Passport- sized photographs preferably be in a white background;

v. Copy of Passport- In case any foreign national intends to become a partner in an LLP, such foreign nationals & NRIs must submit a copy of their passport. Not only this, such passports must be notarized or apostilled by the relevant authorities in the country of such foreign nationals, and NRI or the Indian Embassy situated in that country can also sign the documents. However, in case the documents are in a language other than English, a copy of a notarized or apostilled translation copy shall be attached.

 

 

Documents of prospective LLP registered in Bangalore, Karnataka

i. Proof of registered Address- It is compulsory for every LLP to submit an address proof of the registered office during registration or within 30 days of its incorporation. In case the LLP office is situated in a rented place, a copy of the rent agreement and a no-objection certificate from the landlord will be required to be attached.

ii. Any one of the partners will need to apply & obtain a digital signature certificate for filling & incorporation of LLP purposes since all documents and applications will be digitally signed by the authorized signatory.

iii. Copy of the Utility bills such as electricity or telephone bills must be submitted along with the proof of address. The proof of address should include the complete address of the premises and the name of the owner of the property. Utility bills should not be older than more than 2 months.

iv. Sale deed/property deed in English (in case of owned property).

 

 

Advantages of LLP Registration in Bangalore, Karnataka

i. Limited Liability

An LLP is a body corporate and enjoys separate existence as a legal person apart from its partners in the eyes of law. Therefore, it offers the benefit of limited liability to its partners. In simple words, in the event of any debt recovery or dissolution of LLP, the liability of each partner is restricted to the agreed contribution by him & cannot go beyond such limit unless in exceptional circumstances such as fraud or mismanagement of business operations.

This benefit has been provided for the partners to undertake business operations without any worries and increases their assurance to undertake business activities.

ii. No upper limit for the partners

Under the provisions of the LLP Act, each partner must have at least two partners at the time of the registration. However, unlike a private company that cannot have more than 200 shareholders, there is no upper ceiling for the maximum number of partners in an LLP.

iii. Lesser Costs for Managing Compliances

Unlike a company that has to conduct audits, general & board meetings, etc. every year, there are fewer compliances which automatically reduce the costs of managing compliances for an LLP making it an attractive choice for entrepreneurs.

iv. Modest structure of Profit Sharing

In an LLP, the business profits are taxed only once and not after profits are shared in the hands of the partners of the LLP. Further, the payments made to partners in an LLP in India by way of payment of interest to partners, any other payment by way of salary, bonus, commission, or remuneration to partners is allowed a deduction under Section 40(b) of the Income-tax Act 1961.

v. Ease in transferring ownership

Unlike a partnership firm or a company, it is comparatively easier in an LLP to transfer interests that could be made by making amendments in the LLP Agreement.

vi. Suitable For Small Business

LLPs with a total capital contribution of fewer than ₹25 lakhs and an annual turnover lesser than ₹40 lakhs per year do not need any audits, making them the best option for smaller businesses and Startups.

 

Amendment to LLP Act 2008 in Bangalore, Karnataka

The LLP Amendment Act was amended in 2021 and was notified on 11 February 2022, which brought changes in the LLP Act 2008 that has brought significant changes for the better regulation of LLP in India. Some other significant amendments are as follows-

Decriminalization of Monetary Offenses in Bangalore, Karnataka

The LLP Amendment Act 2021 has decriminalized & reduced penalties for offenses related to technical, minor, and compliance-related offenses, which have been moved to the in-house Adjudication Mechanism framework along with modified penal provisions.

Power to Regional Officers to Compound Offense in Bangalore, Karnataka

The new amendment act has given powers to a Regional officer to compound any offense under the amended legislation. The offense is punishable with a fine along with the process to be followed to compound these offenses as the fine will be charged based on the limit prescribed by the Act. However, the same limit shall not apply if the offender has committed the same offense within three years from the date of committing the first offense.

Reduced Penalties for Start-Up and LLPs in Bangalore, Karnataka

Under the amended LLP Act, a new section 76A has been inserted that attempts to reduce fees & penalties in the case of a small LLP or a start-up. Accordingly, in case of a small LLP/start-up for certain offenses shall attract a penalty of half the amount as specified in the Act, which would be no more than Rs. 1 Lakh for LLP and 50k for each designated partner or any other person as per the case.

Establishment of Special Courts in Bangalore, Karnataka

In order to ensure faster disposal of cases as well as a reduction in the burden of the normal courts, the Act also provides for the establishment of special courts to exclusively try the cases related to the offenses committed under the LLP Act 2008.

Other Key Amendments of LLP Registration in Bangalore, Karnataka

The amended act has also provided relief to the designated partners of an LLP concerning the condition of maintaining its residency in India (residing at least for 180 days in the previous financial year). Thus, from now on the daily limit for the residential designated partners has been reduced from 180 days to 120 days during an FY under Section 7 of the apex act.

Further, the Act has also given recognition to the concept of Start-up LLP and provided the power to the Central government to recognize certain LLP as start-up LLP by issuing notifications from time.

 

Conclusion of LLP registration in Bangalore, Karnataka

Therefore, an LLP registered in Bangalore, Karnataka offers the benefit of limited liability & procedural flexibility to its partners to organize their internal administration & manage their business efficiently. The process of registration is a simpler, faster & convenient process that could be completed in four-five steps. Complete your process of LLP registration & start your journey today!