Incorporation of LLP in India

Procedure for Incorporation of Limited Liability Partnership

Limited Liability partnership Act, 2008 provides the most convenient features of the Partnership Firm and company. In the below, there are some benefits of incorporation of Limited Liability partnership:

1.      No Limit on the Maximum numbers of Partners,

2.      Limited cost of Registration,

3.      No Compulsory Audit  (if Contribution <25 Lakh and Tturnover < 40Lakh),

4.      Dividend Distribution Tax (DDT) is not applicable,

5.      Less compliances requirement,

6.      Limited Liability of its Partners,

7.      Easy to join and Leave LLP and,

8.      Separate Legal Entity

Basic Requirements for Incorporating a LLP are following:

ü  Minimum Two Partners (Individuals, Company or LLP)

ü  Minimum 2 designated partner (Only Individual and one of them should be Resident of India)

ü  PAN is Mandatory for all the Partners

ü  Registered Office of LLP

ü  No Minimum Contribution

Steps wise Registration process for Incorporating Limited Liability Partnership (LLP):

Step 1: Obtain Director Identification Number of all the Designated Partners

Every Person (Individual) intending to be appointed as designated partner of a limited liability partnership has to make an application for allotment of Director Identification Number. MCA has vide its notification amended the limited liability partnership rules, 2009. Now instead of DPIN, every partner who will be appointed as designated Partner , will need to apply for DIN and not DPIN.

Step 2: Obtain Digital Signature Certificate (DSC) of all the Designated Partners

Any designated Partner whose signatures are to be affixed on the e-forms has to obtain Class-2 or Class-3 DSC from any certifying agency. Digital Signature Certificate, need to be registered on the Ministry of Corporate Affairs.

Step 3: Search of Name Availability of Proposed LLP

Name search facility is available on MCA 21 Portal. The system will show all the similar/resembles with existing LLPs based on the search.

After checking the availability of Names Download Form-1 for reservation of name from the website of Ministry of Corporate Affairs.

www.mca.gov.in> MCA Services>e-filing>LLP forms download

Following Details are required to be filled in Form-1:

ü  Enter the Director Identification Number (DIN) of Designated partner. After entering the the DIN and on clicking the Pre fill, system will display the all the details of Partner such as Name of Partner, Registered Address with MCA, Phone, Mobile, Fax and e-mail.

ü  If the designated partner is a Nominee of Body Corporate then select the type of Body Corporate, Enter the Corporate Identification Number (CIN) of the Company.

Confirm yourself that all the details filled in Form-1 are correct, because the same details shall be pre-fill in form-2 for Incorporation of LLP.

Append the Digital Signature Certificate (DSC) and submit the e-form, Pay the necessary fees of Rs. 200 by Credit card (master/Visa) or internet banking.

Step-4 Filing of Form-2 for Incorporation of Subscription Document

After Getting the name Approval from ROC, you need to file Form-2 with ROC.

Information Required to be Filled in Form-2:

ü  Enter the total number of designated Partners with their details

ü  Enter the Contribution by all the partners

ü  Attach proof of Registered office of the LLP

ü  Select the state where Registered office of LLP is situated

ü  Attach the Subscriber’s sheet

Submit form-2 with ROC and pay the fees for registration, based on the contribution made by the Partners.

On submission of all the documents, subject to the satisfaction by the Registrar about all the compliances of LLP Act, will issue a Certificate of Incorporation, it shall be the conclusive Evidence of the Registration.

Step-5 Drafting of LLP Agreement

It is not mandatory to file LLP agreement at the time of Registration, while drafting of LLP agreement keep in mind the provisions of LLP Act. It can be filed within 30 days of Incorporation of LLP. Designated partners are responsible for doing all acts, matters and things that are required to be done for complying with the provisions of the LLP act. They are liable to all penalties imposed on the LLP. So it is very important to draft LLP agreement with professional help.

LLP Agreement should be properly stamped in accordance with Stamp Act of the applicable state.

LLP Agreement contains the following information about LLP:

ü  Details of Designated Partners

ü  Name of the LLP

ü  Registered office of LLP

ü  Monetary Contribution by the Partners

ü  Duties and Liabilities of Partners

ü  Admission and Cessation of Partners

ü  Winding up and Dissolution of LLP and

ü  Validity of the Agreements etc

Step-6 Filing of Form 3 with Registrar of Companies

Once ROC approved all the Formalities for Registration of LLP, then file LLP Agreement in form-3. It is the obligation of all the designated partners to do all the acts that are required to comply with the provision of the Act.

Once ROC satisfied himself and approved all the formalities for Registration of LLP gets completed

Regards

CS Chetan Bhadouria

Mob: 9899399209

E-mail: cschetanbhadouria@gmail.com