Setting up of a Limited Liability Partnership (LLP)

LLP

Features of LLP

• It has a separate legal entity just like companies
• The liability of each partner is limited to the contribution made by partner
• The cost of forming an LLP is low
• Less compliance and regulations
• No requirement of minimum capital contribution

The minimum number of partners to incorporate an LLP is 2. There is no upper limit on the maximum number of partners of LLP. Among the partners, there should be minimum two designated partners who shall be individuals, and at least one of them should be resident in India. The rights and duties of designated partners are governed by the LLP agreement. They are directly responsible for the compliance of all the provisions of LLP Act 2008 and provisions specified in LLP agreement.

If you want to start your business with Limited Liability Partnership, then you must get it registered under Limited liability Partnership Act, 2008.

Process of Registration as LLP

Step 1: Obtain DSC

Step 2: Apply for DIN

Step 3: Name Approval

Step 4: Incorporation of LLP

Step 5: File LLP Agreement

Steps to form a limited liability partnership

Step 1: Digital Signature Certificate (DSC)

Before initiating the process of registration, you must apply for the digital signature of the designated partners of the proposed LLP. This is because all the documents for LLP are filed online and are required to be digitally signed.

Step 2: Director Identification Number (DIN)

You have to apply for the DIN of all the designated partners or those intending to be designated partner of the proposed LLP.

Step 3: Reservation of Name

LLP-RUN (Limited Liability Partnership-Reserve Unique Name) is filed for the reservation of name of proposed LLP which shall be processed by the Central Registration Centre under Non-STP. But before quoting the name in the form, it is recommended that you use the free name search facility on MCA portal. The system will provide the list of closely resembling names of existing companies/LLPs based on the search criteria filled up.

This will help you in choosing names not similar to already existing names. The registrar will approve the name only if the name is not undesirable in the opinion of the Central Government and does not resemble any existing partnership firm or an LLP or a body corporate or a trademark. The form RUN-LLP has to be accompanied with fees as per Annexure ‘A’ which may be either approved/rejected by the registrar. A re-submission of the form shall be allowed to be made within 15 days for rectifying the defects. There is a provision to provide for 2 proposed names of the LLP.

Step 4: Incorporation of LLP

1. The form used for incorporation is FiLLiP(Form for incorporation of Limited Liability Partnership) which shall be filed with the Registrar who has a jurisdiction over the state in which the registered office of the LLP is situated. The form will be an integrated form.
2. Fees as per Annexure ‘A’ shall be paid.
3. This form also provides for applying for allotment of DPIN, if an individual who is to be appointed as a designated partner does not have a DPIN or DIN.
4. The application for allotment shall be allowed to be made by two individuals only.
5. The application for reservation may be made through FiLLiP too.
6. If the name that is applied for is approved, then this approved and reserved name shall be filled as the proposed name of the LLP

Step 5: File Limited Liability Partnership Agreement 

LLP agreement governs the mutual rights and duties amongst the partners and also between the LLP and its partners.

• LLP agreement must be filed in form 3 online onMCA Portal.
• Form 3 for LLP agreement has to be filed within 30 days of the date of incorporation.
• The LLP Agreement has to be printed on Stamp Paper. The value of Stamp Paper is different for every state.

Here is a list of documents required for registration:

Documents of Partners:

• PAN Card/ ID Proof of the Partners
• Address Proof of the partners
• Residence Proof of Partners
• Photograph
• Passport (in case of Foreign Nationals/ NRIs)

Documents of LLP:

• Proof of Registered Office Address