How to Start a Limited Liability Company

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Abstract/SUMMARY

An abstract is a brief or condensed statement by the writer, or the essential ideas of the writer’s work. It should be straight to the point, not too descriptive but highly informative. It is a statement of the problem, a summary of the scope, methods and procedures, findings and results of the project.

This Project is a Study about how to start an HOW TO START LLC/LLP/CO. These 3 are basically a commonly seen things. Everywhere we see we notice some or the other company and only few have the knowledge of what type of company it is.

Introduction

What is Limited Liability Company?

A Limited Liability Company (LLC) is a business structure which consolidates the pass-through levy of an association or sole proprietorship through the restricted risk of an enterprise. LLC is not a partnership, however it is an authoritative document of an organization that gives LLC to its holders in numerous wards

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Nature of a LLC

A LLC is a sort of business arrangement that joins certain parts of company and association. It offers the parts a restricted obligation. Also the parts are not generally subject for the organization's obligation. The LLC part will just lose the cash that he/she put into the business. The LLC Company must keep a different element which is valuable to make a working understanding when framing a LLC. This will detail the rights, obligation, and obligations of the parts and % of the organization that every part possesses.

This is help full in dodging discussion and clash that can emerge from a Llcs generally adaptable administration structure.

Types of LLC

Sole Proprietorship

This is the circumstances where stand out individual possesses the business and oversees it. He is generally at risk for business exchanges, obligations and charges the business makes or owes. This is the most widely recognized and less lavish sort of documenting to structure. It likewise includes less paperwork.

Limited Partnership

There is more than one individual imparting obligation, however the key distinction is that one part must keep up full risk for the business structure and have no less than one part that just has a restricted measure of obligation.

General Partnership

A General association is fundamentally the same to a constrained organization. This structure is utilized when there is more than one part of the LLC being structured. This organization implies each of the co-holders is presently in charge of the obligations, business exchanges and assessments the business makes.

Family Limited Partnership

This structure is much the same as the restricted association as depicted above, aside from all the parts are relatives. Most generally, families for this situation structure a restricted obligation organization as an issue or constrained association and afterward put their advantages into this structure. When they feel it is important to do thus, they can appoint control or change the participation so the kids or different relatives take full control over the advantages. Doing this in the structure of a constrained obligation organization may spare the family cash relying upon the circumstances.

The Formation of an LLC

This structure is much the same as the restricted organization as depicted above, with the exception of every last one of parts are relatives. Most regularly, families for this situation structure a restricted obligation organization as an issue or constrained association and afterward put their benefits into this structure. When they feel it is important to do in this way, they can allot control or change the participation so the youngsters or different relatives take full control over the advantages. Doing this in the structure of a restricted obligation organization may spare the family cash relying upon the circumstances.

Jurisdictional requirements Of a LCC

Before making an LCC form by the members they should be aware of the rules and requirements that are already there in Jurisdiction. There are certain rules and procedures that has to be followed and take notice of before going ahead.

WHAT IS Limited Liability Partnership?

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Limited Liability Partnership is another name for a Limited Liability Company and it’s used by professional associates. The Partner here is limited to the amount invested unlike LLC. So, it prevents the partner for being accountable for the wrongdoing of the other partner. And LLP is used mainly in Law or Accounting Firms.

LEGAL FRAMEWORK OF LLP

The Limited Liability Partnership Is basically governed by Limited Liability Partnership (LLP) Act, 2008 and Limited Liability Partnership Rules, 2009. The LLP Rules, 2009 contains administrative provisions for formation, management, reconstruction and winding up of LLPs. Central Government has the power to make applicable any provision of Companies Act to LLP with suitable modifications by issuing a notification. The Indian Partnership Act, 1932 is not be applicable to LLPs.

Key features of LLP Act

  • LLP is a body and a legal entity which separates it from its partners.
  • There is no limits to how many member can be added to the firm unlike an ordinary partnership firm where the maximum number of partners cannot exceed 20 (10 in case of banking).
  • While the LLP will be a separate entity which is liablefor all its assets and the liability of the partners would be limited to their agreed contribution to the LLP.
  • No Partner is responsible for the wrong decisions made by other partners
  • The framework of LLP has no limits to professional services alone. Any business activities can be undertaken using the LLP structure.
  • Enrollment Charge points of interest –
  • Enrollment charge according to the piece given in Annexure An of the LLP Tenets, 2009.
  • Constrained Risk Association whose commitment does not surpass
  • Rs. 1 lakh Rs. 500/ -
  • Rs. 1 lakh however does not surpass Rs. 5 lakhs Rs. 2000/ -
  • Rs. 5 lakhs however does not surpass Rs. 10 lakhs Rs.4000/ -
  • Rs. 10 lakh Rs. 5000/ - For recording, enlisting or recording any record, structure, explanation, notice, Articulation of Records and Dissolvability, yearly return and an application alongside the Announcement for transformation of a firm or a privately owned business or an unlisted open organization into LLP by this Demonstration or by these principles obliged or approved to be recorded, enrolled or recorded:
  • Rs. 1 lakh Rs. 50/ -
  • Rs. 1 lakh yet does not surpass Rs. 5 lakhs Rs. 100/ -
  • Rs. 5 lakhs yet does not surpass Rs. 10 lakhs Rs. 150/ -
  • Rs. 10 lakh Rs. 200/ -
  • Essentials for enrolling a LLP
  • Least 2 Accomplices
  • Least 2 Assigned Accomplices who are people.
  • Advanced Mark Endorsement LLP - Name LLP –
  • Assention Enrolled Office

Strategy for creation of an LLP

Step’s For LLP

1. Deciding the Partners and Designated Partners

LLP can be incorporated with a minimum of at least two partners who can be Individuals or Body Corporate through their nominees.

2. Obtaining DPIN No. & Digital Signature

Designated Partner Identification Number (DPIN): As per section (6) of LLP Act 2008, it gives that each Assigned Accomplice to get a DPIN from the Focal Government. DPIN is an eight digit numeric number apportioned by the Focal Government keeping in mind the end goal to recognize a specific accomplice and can be acquired by making an online application in.

Digital Signature Certificate:

Accomplice/Assigned accomplice of LLP, whose marks are to be attached on the e-structures, needs to get class 2 or class 3 Computerized Mark Authentication (DSC) from any approved affirming office

3. Checking the Name Availability:

The following step is to choose the name for the proposed LLP to be joined, they need to choose the name as indicated by the Guideline 18(5) of the Restricted Obligation Organization Act 2008, for reservation of the coveted name. The name of the restricted obligation organization ought not be comparable or indistinguishable with other organization or effectively enrolled LLP. It ought not contains the words which are precluded under the Images and Names (Avoidance of despicable use) Act, 1950 or which fulfills the conditions endorsed under govern 18(2).

4. Drafting of LLP Agreement

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The following related step is drafting of Restricted Risk Association Understanding representing the shared rights and obligations among the accomplices and among the LLP and its accomplices

The contents of Agreement are:

  • Name of LLP
  • Name of Partners & Designated Partners
  • Form of contribution
  • Profit Sharing ratio
  • Rights & Duties of Partners
  • Proposed Business
  • Rules for governing the LLP

5. Filing of Incorporation Documents

Next is the recording of Incorporation archives, assent of Partners and affirmation electronically through the medium of e-structures recommended with the Registrar of LLP for joining of the LLP on installment of endorsed charges focused around the aggregate financial estimation of commitment of accomplices in the proposed LLP.

DocumentsNeeded:

  • Name Availability Application
  • Incorporation Document
  • Details of LLP Agreement
  • Application for Designated Partners Identification Number Subscription Sheet LLP
  • Agreement duly stamped as per relevant Stamp Act of the State.

6. Certificate of Incorporation

After the Registrar is fulfilled that all the conventions regarding the consolidation has been gone along, he will issue a Certificate of Incorporation as to framing of the LLP inside greatest of 14 days of documenting of Form-2 and will issue an authentication of fuse in Form-16.the Certificate of Incorporation issued should be the decisive confirmation of establishment of the LLP.

WHAT IS CO?

An organization is a relationship of people, whether common persons, legitimate persons, or a mixture of both. Organization parts impart a typical reason and unite so as to center their different gifts and arrange their on the whole accessible aptitudes or assets to accomplish particular, announced objectives. Organizations take different structures. It is made at law as legitimate individual so the organization in itself can acknowledge Limited obligation for common obligation and levy acquired as parts perform (or come up short) to release their obligation inside the freely pronounced "conception endorsement" or distributed strategy. Since organizations are lawful persons, they likewise may partner and register themselves as organizations - regularly known as an issue bunch. At the point when the organization closes it may require a "passing declaration" to keep away from further lawful commitments.

Steps to start a Company

Creating an Organizational Structure

We have to consider the authoritative structure before beginning a business. Whether its fuse, structure a constrained risk organization or an association, or run it as an issue proprietorship, talking about the profits of every authoritative structure with lawyer or business counselor permits to settle on the right choice. We need to check with the Secretary of State for essential reports and suitable business filings. Innovation permits numerous entrepreneurs to record obliged documentation electronically.

Taxation

Contingent upon the business sort, we may fit the bill for specific sorts of expense classes, for example, a S Company or a 501(c) 3 association for charitable associations. Get to know the focal points of each one expense classification with bookkeeper, lawyer or business counselor

Employment

On the off chance that we are beginning a business that will be staffed with representatives, check with federal, state and nearby government substances for filings and regulations identified with turning into a superintendent. The Equal Employment Opportunity Commission and Occupational Safety and Health Administration oblige executives to post data about the lowest pay permitted by law and reasonable work hones. Without these obliged postings, we may be liable to punishments, fines and conceivable suit.

12.Conclusions and recommendations

There are a no. of steps to start a particular firm. In order to avoid any kind of government intervention it is advisable to follow all the rules and regulations. Failure to do so would result in unavoidable intervention by the government leading to a loss in the creditability of the company as well as loss of goodwill.

References

"What is a limited liability company?". Nolo.com. Retrieved 29 October 2014

http://smallbusiness.chron.com/

Wikipedia.org