Common Mistakes To Avoid During LLP Registration

The concept of LLPs provides flexibility coupled with limited liability, which is why they enjoy popularity among undertakers. But the fact of LLP registration has some sort of disclosure at every phase of the registration process and even doing it can be quite tricky. This part of the blog focuses on the main difficulties people encounter during the formation of the LLP company and real-life solutions.

Challenges and Solutions to LLP Registration: 

1.  Select the Right Name For LLP

The first and perhaps one of the most important requirements of Limited Liability Company Registration is the name of the firm. The chosen name must satisfy or follow several naming standards set by the Ministry of Corporate Affairs also called MCA and must not be similar to an existing company or LLP name.

Challenges: 

Uniqueness Requirement: A registered name must not be close in similarity with other registered enterprises.

Rejection Risk: Entities bearing close similarities in the spelling of their names to already existing entities, have their names rejected.

Solutions: 

The wills of using the LLP Name Reservation Tool on the MCA portal can be checked here for the availability of the name.

This will help you stand out and help to include terms that would not be included in other sites or businesses.

LegalRaasta Consultants are professionals who deal with company incorporation for businesses to ensure that they register under the right act of MCA.

2. Drafting the LLP Agreement

This agreement outlines the shares, and responsibilities of the partners in the LLP. That is why errors and slips in this document cause legal and operational problems.

Challenges: 

Unclear terms and clauses are used in contracts.

They say that often necessary provisions for future activities such as partner withdrawal or conflict resolution might be omitted.

Solutions: 

Hire competent lawyers to prepare a complete contract, which will suit your line of business.

It is recommended that the type of terms concerning the increasing of profits, the scale of contribution, division of work, and governing methods that involve the profit-sharing ratio and capital should also be included.

Also Read This - Streamline Business Setup by LLP Registration

3. Documentation Hurdles

This is followed by the documentation process where the LLP needs to produce various proofs consisting of PAN cards, identity IDs, and address IDs both of partners and business premise.

Challenges: 

Marked wrong and partially filled responses.

Differences in some papers that are supposed to either be similar or serve the same purpose.

Solutions: 

It is a good practice to make a list of all documents that have to be attached in order to minimize leaving out some important documents.

Ensure compliance with laid down standards in terms of detail before submission of work.

Make use of professional help in writing these papers and also ask for a faster approval process.

4. Technical Challenges with Filing:

The whole process of LLP registration is online through the MCA portal which may entail some challenges to those practising it for the first time.

Challenges: 

Problems in filing through the Internet.

Because of downtimes on the Portal, delays are very much possible.

Solutions: 

Do a quick search to understand of how the MCA portal works. You might find the information about all your queries in the official FAQ section.

It is advisable to work with professionals who often deal with the specific aspects of LLP company registration and who are in a position to handle technical issues.

5. Compliance with the given Prerequisites

In addition to these, the LLPs are to fulfill compliance obligations annually, and statutory reporting necessities.

Challenges: 

Failure to recognize compliance phases and related timeframes.

Risk of compensation for non-compliance.

Solutions: 

Try to keep a checklist or even a calendar of all pending filing dates.

Source consultants can provide full compliance assistance for your organization.

Also Read This - Start A Startup In India With LLP Registration

Conclusion: 

Despite the numerous hurdles that one is likely to encounter in the process of registering a company as an LLP it is always useful to get it right with the necessary preparation and the right legal aid. As a Company Registration Expert, we at LegalRaasta, will ensure your dreams of starting a business come true, with services for LLP registration, and more. Don’t wait for the future to knock on your door, contact our professional services for its preparation now!