LLP stands for Limited Liability Partnership, and it combines the advantages of a corporation with the flexibility of a partnership. Regardless of changes in partners, a Limited Liability Partnership can continue to exist. It has the ability to form contracts and possess property in its own name. Limited Liability Partnership is a separate legal organization with full accountability for its assets, but the partners’ liability is fixed to their agreed-upon investment to the Limited Liability Partnership. Individual partners are also protected from joint liability produced by another partner’s incorrect business operations or misconduct because no partner is liable for the independent or un-authorized actions of other partners.
An agreement between the partners or between the partners and the Limited Liability Partnership, as the case may be, governs the mutual rights and duties of the partners within an Limited Liability Partnership. The Limited Liability Partnership, on the other hand, remains liable for its other duties as a separate business. Limited Liability Partnership is referred to as a hybrid between a company and a partnership since it incorporates aspects of both “a corporate structure” and “a partnership firm structure.” As a result, it has restricted liability for its participants, similar to a corporation, as well as the tax advantages of a partnership firm.
Other nations that use the Limited Liability Partnership structure include the United Kingdom, the United States of America, certain Gulf countries, Australia, and Singapore. The Limited Liability Partnership Act is based on the UK Limited Liability Partnership Act 2000 and the Singapore Limited Liability Partnership Act 2005, both of which allow limited liability partnerships to be formed in a body corporate form, that is, as a separate legal entity from its partners or members. Limited Liability Partnerships (LLPs) are a type of business model that:
- It is organized and operated under the terms of a contract.
- allows for flexibility without imposing certain legal and procedural restrictions.
- allows professional/technical competence and initiative to be combined with financial risk-taking capacity in a novel and efficient way.
Steps for setting up a Limited Liability Partnership
To form Limited Liability Partnership in India, you must first obtain a Designated Partner Identification Number (DPIN), which can be obtained by completing an eForm for obtaining the DIN or DPIN. After that, you’ll need to get your Digital Signature Certificate and register it on the site of Ministry of External Affairs. After that, you must have the Ministry approve the Limited Liability Partnership name. After the Limited Liability Partnership name has been authorized, you can file the incorporation form to register the Limited Liability Partnership.
Step 1 : Application for DIN or DPIN
The proposed Limited Liability Partnership’s designated partners must obtain a “Designated Partner Identification Number “. To receive a Designated Partner Identification Number, you must complete eForm DIR-3. A Director Identification Number can be utilized as a Designated Partner Identification Number if you already have one.
Step 2 : Acquire/ Register Digital Signature Certificate
The Information Technology Act of 2000 allows for the use of digital signatures on documents submitted in electronic form to assure the security and authenticity of those papers. This is the only safe and secure method of submitting a document electronically. As a result, all Limited Liability Partnership (s) filings must be done with the use of Digital Signatures by the person permitted to sign the documents.
Obtain a Digital Signature Certificate – The digital signature is issued by a qualified Certifying Authority (CA). A person who has been awarded a license to issue a digital signature certificate under Section 24 of the Indian IT-Act 2000 is referred to as a certifying authority (CA). Only once the signatories have registered their Digital signature certificates with the Limited Liability Partnership application can the role check be completed.
Step 3 : New User Registration
To submit an eForm or use any paid service on the Limited Liability Partnership portal, you must first register as a user in the appropriate user category, such as registered or business user.
Step 4 : Incorporate a Limited Liability Partnership
Fill out Form 1 (Application for reservation or change of name) to request that the Limited Liability Partnership ‘s name be registered. After that, file the relevant incorporation Form 2 (Incorporation document and Subscriber’s declaration) based on the planned Limited Liability Partnership.
You will receive an email once the form has been approved by the Ministry’s responsible official, and the status of the form will be changed to Approved.
Step 5 : File Limited Liability Partnership Agreement
After the Limited Liability Partnership is formed, an initial agreement must be filed within 30 days of the formation. The information must be entered into Form 3 by the user ( Information with regard to Limited Liability Partnership Agreement and changes, if any, made therein).
Documents for formation
- Permanent account number (PAN) card or ID evidence; Address proof; Residence proof; Photograph; and Passport (in case of foreign nationals, or NRIs).
- Limited Liability Partnership ‘s legal documents
- Digital Signature Certificate and proof of registered office address
Refer to Ministry of Corporate Affairs for more information
I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.
If you are interested in participating in the same, do let me know.
The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.
If you would also like to contribute to my website, then do share your articles or poems at firstname.lastname@example.org
We also have a Facebook Group Restarter Moms for Mothers or Women who would like to rejoin their careers post a career break or women who are enterpreneurs.
We are also running a series Inspirational Women from January 2021 to March 31,2021, featuring around 1000 stories about Indian Women, who changed the world. #choosetochallenge