After the Incorporation of LLP, what shall you do now? What are the Post Incorporation Compliances?

Incorporation of LLP

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Getting the Certificate of Registration for your Limited Liability Partnership (LLP) is a thrilling moment in your business start-up journey. After arranging required documents and submitting the same to the Udyog Buddy Team, deciding the name, processing Digital Signatures, and much more for further processing, and filing Form-FILLIP with MCA. After all this hard work, finally, your LLP is incorporated. But as a layman, you are always thinking what next?

So, Obtaining the Certificate of Incorporation is only a starting point for an entrepreneurial journey. Post Incorporation of LLP there are few compliances that you MUST take care of.

We request to spare few minutes periodically to review the timely compliance of requirements from time to time. Compliance requirements may vary from business to business depends on the type of organization and nature of business activities. Non-compliances attract a hefty penalty.

STEPS TO BE TAKEN AFTER INCORPORATION OF LLP

The following are the immediate 10 steps to be taken after the Incorporation of LLP:

  1. Permanent Account Number (PAN) Application

Unlike a company, the LLP does not get a PAN along with the certificate of Incorporation. So, every LLP has to obtain a Permanent Account Number (PAN) from the Income-tax department, Government of India. PAN is also required for various other registrations, hence it is crucial to apply for PAN. For obtaining a PAN, the LLP has to make an application with a copy of its Certificate of Incorporation and Identity proof of designated partners.

  1. Drafting and Filing of LLP Agreement

Immediately after incorporation of LLP, the LLP agreement needs to be drafted, finalized, signed, stamped, and notarized. LLP Agreement must be stamped as per Stamp Act of respective state where the LLP is registered. This LLP Agreement needs to be filed with FORM – 3 within 30 days of Incorporation. The delay in filing the LLP agreement shall attract a penalty of Rs.100.00 per day.

  1. Opening Bank Account in LLP Name

After Incorporation of LLP, it is necessary to open a Current Account in the name of the LLP with any Bank in India. All the transactions in the name of the LLP should be transacted through the LLP Bank Account only. The documents required for opening a current bank account varies from bank to bank but the basic document required are certificate of Incorporation, LLP Agreement, PAN, initial deposit, resolution for opening account, identity and address proof of Designated partners and partners of LLP.

  1. Startup India Recognition

Start-up India Scheme is a flagship initiative of the Government of India, intended to build a strong eco-system for nurturing innovation and Startups in the country that will drive sustainable economic growth and generate large-scale employment opportunities.

Start-up India Scheme is implemented through the Department of Industrial Policy & Promotions (DIPP), Government of India.

A business will be recognized as a ‘Start-up’ under this scheme only after obtaining a Certificate of Registration from Start-up India Hub. Post recognition the LLP will get many benefits and free software for various purposes.

Also, if the LLP has startup India recognition, they will enjoy 50% off on government fees for trademark and 80% on government fees for the patent.

  1. Trademark Registration

Registering an LLP with a name does not provide complete protection to the name or brand name. The protection of Company /LLP name under the Companies Act / LLP Act is limited to the extent that another Company or LLP will not be registered with the same or a closely resembling name.

For securing the brand name Logo, trademark registration is extremely important. So it is advised to file a trademark and be safe from copycat.

  1. Books and Accounts of LLP

Every business is required to under Income Tax Compliances such as Tax Deduction at Source (TDS) and Advance Tax Payments from time to time.

Every LLP has to prepare and keep the books of account in a double-entry system of accounting on an accrual basis. The LLP has to maintain the Books of Accounts of all receipts payments and to comply with legal requirements under the Companies Act and other various laws. The books of accounts and financial statements shall give a true and fair view of the state of the affairs of the LLP, including its branch office or offices.

The books of account should be kept at its registered office or such other place in India as the Board of Designated Partners may decide from to time. The books of account can be maintained in electronic mode subject to conditions under the Companies Act.

  1. Shop and Establishment Registration

Every Business Establishment is required to obtain Shop and Establishment Registration under the respective State Shop and Establishment Act and Rules within 30 days of registration.

This is a state-specific mandatory registration for all the business and establishments. The LLP must obtain the Shop and Establishment Registration in every state wherever they have offices and establishments.

  1. Professional Tax Registration – Employer & Employee

Every LLP who employs people with more than the specified limit of salary (this limit varies from State to State) has to obtain Professional Tax – Employee Registration (Registration Certificate), when they start employing people. For this purpose, the Partners / Designated Partners shall be treated as employees if they are drawing salary beyond the specified limits. Also, the employer must deduct the Professional Tax from the salary of the employee and pay it to the State Govt. on monthly basis.

  1. Infusion of Initial Capital by Subscribers to Memorandum 

The initial partners of LLP have to bring the amount of capital contribution as stated in the subscription documents and LLP Agreement at the time of its registration within 60 days of Incorporation of LLP.

Though there are no explicit conditions in LLP Act as to this time limit for bringing the capital, it is advisable to bring the subscribed capital with 60 days of incorporation of LLP.

  1. Goods and Services Tax (GST) Registration

Every business with annual turnover exceeds Rs. 40 lakhs (Service providers 20 lakhs) is required to GST Registration under Goods and Services Tax (GST) Act and Rules.

It is not mandatory to obtain GST immediately after incorporation of LLP. The LLP can obtain this registration as and when required.

In case the LLP has to produce its GSTIN to any third parties or authorities for its business, the LLP may. has to obtain the GST Registration immediately after registration of LLP.

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