Any individual, or even a company or an LLP, can become a partner. However, only an individual can become a ‘designated partner’ in an LLP.

Yes, non-resident Indians and foreign nationals can start an LLP, provided they submit the necessary documents after getting it notarized by the concerned authorities. However, every LLP should have atleast one resident Indian as a designated partners in the LLP.

An LLP agreement is one that is made between the partners and the LLP regarding the relationship between the individual partners in the LLP. An LLP agreement usually consists of management policies, inclusion of new partners, policy making strategies etc.

According to the LLP Act, a minimum of two designated partners are required to start an LLP.

Start-ups not looking for venture capital funding register LLPs. This is because venture capitalists only invest in private and public limited companies.

Yes, it is much cheaper to run an LLP than a private limited company, particularly in your early start-up days. This is because applicability of statutory audit by a Chartered Accountant applies only if LLP’s have a contribution in excess of Rs. 25 lakh or turnover exceeding Rs. 40 lakh in a financial year. But the only drawback is with regard to fine imposed for non filing of requisite documents within the time frame prescribed. The fine imposed is Rs. 100/- per day for every continuing day of default and this does not have a maximum fine limit. Also an LLP could be wound up only if no statutory filings are pending.

No matter whether the LLP is actively into business or not and whether there is no profit or meagre profit, every LLP has to mandatorily file the following documents annually:

• Income Tax return with IT Dept.
• Statements of Solvency and Annual Returns with Registrar of Companies