Overview of LLP registration in Chandigarh, Punjab
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 Chandigarh, Punjab, 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 Punjab
Punjab is located in northern India; it shares national borders with Himachal Pradesh, Haryana, Rajasthan, Chandigarh, and Jammu & Kashmir, and the international border with Pakistan. Punjab is the 19th largest state in area and the 16th largest state in population with 23 districts. Punjab’s official and widely spoken language is Punjabi; it is written in Gurmukhi script, and the major ethnic groups in Punjab are Sikh, Hindu, and Punjabis. The state shares its capital Chandigarh with the neighboring state Haryana.
It is named Punjab because the five tributary rivers (Sutlej, Beas, Ravi, Chenab, and Jhelum) of the Indus River flow in this state. The state has suffered from the dark scars of the holocaust during the partition in 1947. Punjab is the 9th highest-ranking state on the State Human Development Index. The sex ratio of Punjab is constantly declining, as the sex ratio of the state is 895 females per thousand males.
As Punjab has the most fertile land so, the economy of the state is highly dependent on agriculture. Punjab’s soil and climatic conditions are perfect for growing sugarcane, wheat, rice, fruits, and vegetables. Punjab’s economy has always been based on agriculture, but the state’s economy got a boost after the launch of the Green Revolution. The largest cultivated crop in Punjab is wheat, and Ferozepur and Fazilka districts are the largest producers of wheat and rice. Punjab is called the breadbasket of India because it has high wheat production. The state has recorded the lowest level of hunger in India, according to the Indian state hunger index. Besides agriculture, the other sources of economic development in Punjab are tourism, music, and the film industry.
Capital- Chandigarh
The startup ecosystem of Punjab
In the state’s startup ranking 2019 Punjab has been entitled as the aspiring leader. In 2017 the Punjab government officially launched its Industrial and business development policy. The motto of the Policy was to promote industrial development to nurture and grow the startup ecosystem. The 2017 Industrial Business Development policy aims to promote innovation and entrepreneurship spirit in the people of Punjab so that they can shift from job seekers to job creators.
To build a robust startup ecosystem, the state government has promoted networking of prominent academic institutions of higher education that carry out research and innovation along with other organizations operating incubators and accelerators. Following are the main objectives of the industrial and business development policy 2017: –
The policy aims to build a strong startup ecosystem and promote the entrepreneurship spirit in the people of Punjab, especially the young population.
Through the policy, the government of Punjab wants to promote private incubators and accelerators and facilitate funding mechanisms for entrepreneurs to nurture the startups.
The policy is framed to promote incubation centers by the government organization to build a robust startup ecosystem.
The government of Punjab is creating a common infrastructure in all the districts of Punjab. The infrastructure comprises the ready-to-use office spaces, research, and development testing laboratories, software, and hardware solutions; the Punjab government makes all these infrastructure changes to ensure a strong startup ecosystem.
The policy aims to promote sector-specific incubators and set up incubation centers in universities and other academic institutions of higher education.
The state government aims to give special attention to scheduling caste and women entrepreneurship to upgrade their socio-economic status through the policy.
Top business ideas in Punjab
Phulkari business
Phulkari’s work of Punjab is famous all around the world. Phulkari, in its literal sense, means flower work. Phulkari is a handmade embroidery on clothes, and it employs the women of Punjab particularly. By setting up a Phulkari business, you can employ the local women of Punjab, which means that you can find high-quality work with low payment. Phulkari business is a low investment business, and you can export your Phulkari products to the international markets to gain high profits.
Farm equipment lease
Not every farmer in Punjab can afford to have their farming equipment. So, setting up a Farm equipment lease business is a long-term profit-providing idea. To set up a farm equipment lease business, you need a lot of investment to buy modern technology, like tractors, threshers, sprayers, etc. Though this is a high investment business, it will help you make huge profits. You can lease your farming equipment hourly and maximize the return.
Seed store business
Usually, the producer sells the product to the customer, but what if I tell you that you can sell something to the producer. You can establish a seed store in Punjab, selling plant seeds, animal feed, fertilizers, and pesticides to the farmers. You can also link your store with online websites to expand your business. However, setting up a seed store needs considerable investment, but once it is established, it will make huge profits.
Dairy parlor business
Punjab is famous forits dairy products. Many customers love buying fresh milk, curd, and paneer. They prefer purchasing milk-related products from the local milkman rather than pasteurized packets. Especially the people of Punjab are way too health-conscious regarding dairy products. Lassi is the traditional drink of Punjab, and Punjabi people love milk and milk-related products. So, setting up a dairy farm in Punjab can make you earn huge profits. You can also sell your products online by establishing a website. If you don’t have enough milk or milk-related products to sell online, you can tie up with local milkmen to complete the demand.
Organic farming
Punjab has agricultural land where most farmers are engaged in agriculture and farming, mainly organic farming. Organic farming in Punjab is an excellent startup idea as you can directly send your organic vegetables and fruits to the market. The demand for organic vegetables and fruits is on the rise in the market. People nowadays do not mind paying extra money for organic products and food, so if you know about organic farming, setting up an organic grocery store and organic farming business is an excellent startup idea in Punjab. The organic farming startup is a low-investment and high-profit business. One can employ your land and sell theproducts to regional, national, and international markets. The only thing that is crucial and needs to be kept in mind is that one should avoid mediators or agents while selling their organic products as they consume a lot of commission. If you find growing and selling your organic products difficult, you can contact the small-scale farmers and sell organic products in partnership.
Salient Features of LLP registered in Chandigarh, Punjab
- 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 Chandigarh, Punjab
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 Chandigarh, Punjab
The 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 Chandigarh, Punjab
i. Acquire a Digital Signature Certificate (DSC) in Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
Following documents should be available in a scanned format to be attached with the form of registration of LLP in Chandigarh, Punjab-
Documents of Prospective Partners in Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
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 Chandigarh, Punjab
Therefore, an LLP registered in Chandigarh, Punjab 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!
