A Limited Liability Partnership (LLP) is a kind of partnership in some type of company where all of the parties have limited liability. This means that none of the partners was liable for the damages, negligence, or wrongdoing of the others. This is referred to as a Limited Liability Partnership since each partner is only responsible for a portion of the gross liability. Partners, unlike owners, have the authority to run the business. As a result of these traits, LLPs seem to have characteristics of both companies and alliances.
In common parlance, a Limited Liability Partnership is formed when two or more people associate for the purpose of carrying on a legal business for profit, and any shift in the partners in a Limited Liability Partnership has little effect on the Limited Liability Partnership’s life, rights, or liabilities.
Small, medium-sized companies or professionals may benefit from this unique mix of a limited and partnership organization.
Steps to form LLP in India:
A Limited Liability Partnership can be formed using the steps outlined below:
- Step 1: Registration of Users
- Create an account on the Ministry of Corporate Affairs’ website, http://www.llp.gov.in, which is dedicated to LLP services. This website can also be accessed via the ministry’s website, http://www.mca.gov.in. Click the “Register” button in the top right-hand corner of the URL http://www.llp.gov.in’s home page.
- Complete the online entry process. The form’s fields labelled with an asterisk (*) must be filled in. Choose a user name and a password.
- Certificate with digital signature to be uploaded
- After a successful login, the machine will display a message stating that you have been successfully registered.
- Step 2: Obtain Designated Partners Identification Number (DPIN):
- All assigned members of the planned LLP must receive a “Designated Partner Identification Number (DPIN) / Director Identification Number (DIN)”.
- You can apply for DPIN/DIN at http://www.mca.gov.in/MCA21/ Din.html.
- Step 3: Getting Digital Signature Certificate (DSC):
The third stage in the LLP registration process is to obtain digital signatures from all of the LLP’s designated partners. Since the LLP’s papers are filed electronically, a digital signature is required. These records have digital fingerprints, which aid in the certification process.
Certified government agencies such as the National Informatics Center, IDRBT Certifying Authority, E-MUDHRA, CDAC, and NSDL will provide the appropriate digital signatures. The price of obtaining a DSC can vary depending on which certifying agent the applicant has applied to.
- Step 4: Reservation of the Name:
The claimant must obtain a Limited Liability Partnership-Reserve Unique Name (LLP-RUN) that can be processed at the Central Registration Centre in order to register a proposed LLP. However, it is still a good idea to search the Ministry of Corporate Affairs (MCA) site for a free name before referencing or quoting it. This will generate a list of firms with names that are identical or close to the proposed LLP. If you’ve decided on a name, the registrar would accept it so it isn’t too close to any other LLP. The LLP-RUN must be sent along with a fee, after which it will be forwarded to the registrar for approval.
In order to get the Name registered through online portal, one needs to:
- To access the LLP portal, go to the top right corner of the homepage and press the “sign in” button, then type your username and password. Click the “E-Forms” icon after logging in.
- Fill in the information on Form-1 for a name reservation. Choose the proposed LLP’s name (up to 6 choices can be indicated).
- Form-1 may be submitted by any partner or designated partner in the proposed LLP.
- Sign the e-form with digital signatures and apply it.
- Pay the necessary fee with a credit card (Mastercard or Visa).
- The MCA gateway offers a free name check (for established firms / LLPs) (hyper link available on LLP portal). Based on the search parameters entered, the system would generate a list of current company/LLP names that are similar/closely resembling.
- The proposal for name reservation must include the information of at least two designated partners of the proposed LLP, one of whom must be a citizen of India. As designated partners, only persons or nominees acting on behalf of the bodies corporate as partners are permitted.
- Log in to the portal to check the status of your submission.
- Step 5: Incorporation of LLP:
- Log on to the site and fill out Form-2 “Incorporation Document and Statement” until the name has been reserved by the Registrar.
- Pay the required registration fee dependent on the overall monetary value of partners’ contributions in the proposed LLP, as specified in Annexure A of the LLP Rules, 2009.
- An individual listed in the incorporation document as a designated partner with a permanent DPIN, as well as an advocate/company secretary/chartered accountant/cost accountant in practice and engaged in the establishment of an LLP, must digitally sign the statement in the e-form.
- After reviewing all of the records and ascertaining that they are in accordance with the LLP Act, the Registrar will file the LLP within 14 days of filing Form-2 and issue a certificate of incorporation in Form-16.
- By signing into the portal, you can verify the status of your submission.
- Step 6: Sign a Limited Liability Partnership Agreement and file it.
- The partners’ joint rights and responsibilities are governed by this arrangement. On the MCA Portal, you can file the arrangement in Form 3 online. Within 30 days of the date of incorporation, Form 3 for LLP arrangement must be filed. The LLP Agreement must be written on Stamp Paper, and each state has its own stamp paper.
- The DSC and Form 3 take about 15 days to arrive, depending on the availability of all the documentation.
Documents required to form LLP:
- Partners’ Documents
The following documents will be expected of all LLP partners:
- All partners’ identity proofs and PAN cards
- Voter ID, visa, or driver’s license are examples of address proofs for partners.
- On a white backdrop, a passport-sized photograph.
- Passports of NRIs and international nationals who choose to enter an LLP as partners.
- LLP’s legal documents
The following documents are required to be submitted in connection with the LLP entity:
- A verification of the registered office address must be submitted either at the time of registration or within 30 days of the LLP’s incorporation. An NOC from the landlord is needed if the registered office is a rental facility. In addition, you must have at least one confirmation of residency, such as utility bills that are no more than two months old.
- A Certificate with Digital Signature (DSC)
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