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

SPICE Companies Act, 2013 Guide

The Ministry of Corporate Affairs has taken another bold initiative in Government Process Re-engineering (GPR) and launched Simplified Pro-forma for Incorporating Company Electronically (SPICe) e-Form, which are in line with international best practices.

SPICe’s Main features are as follows: -

1.             Simplified and completely Digital form for Company Incorporation

2.   Standard format of e-Memorandum of Association and e-Articles of Association as per Companies Act, 2013

3.        Memorandum and Articles will now be filed as linked e-forms (except for Section 8 companies)

4.             Provision to apply for Company Incorporation with a pre-approved Company Name

5.             Mandatory DSCs of Subscribers and Witnesses (max 7+1) in SPICe MOA and SPICe AOA

6.             Back Office productivity gains due to faster review of e-MOA and e-AOA by approving authories.

Existing INC-29 and INC-7 will be phased out and SPICe will be the Sole, Simplified & Versatile form available for incorporation of a company in India.

The main feature of In INC-32 is in point No. 5(a)(i) of INC-32 Form, there is a option “Whether Name is already approved by Registrar of Companies” Company has to select  Yes or No in this Option. 

If you select Yes (Means Company has got name approval in INC-1) then mention the SRN of such INC-1. 

If you select No, in that case name is not approved by INC-1 then mention the name and significance as we were applying in INC-29.

"Everything you need to know about SPICe”

Bold Step is taken by Ministry of Corporate Affairs through a notification dated 01^st October, 2016 for incorporation of companies by introducing a new e-Form under the SPICe (Simplified Proforma for Incorporating Company Electronically) by filing an online application form-INC-32, in addition to the Memorandum of Association (in e-form-INC-33) and Articles of Association, (in form INC-34)

Visit the Link For Circular...!!!

http://www.mca.gov.in/Ministry/pdf/CompaniesIncorporationFourthAmendmentRules_01102016.pdf

What do you mean by SPICe ?

This is the steps which cover the digitization of Company Incorporation Procedure and reduced the Paper Work.

SPICe means Simplified Proforma for Incorporating Company Electronically. This is nothing but only digitization the Process of Incorporation of Company. As per the notification, MCA has notified simplified integrated process for incorporating a company in E-form INC-32 along with Memorandum of Association in E-form INC-33 and Article of Association in E-form INC-34. So by this process MCA has simplified the procedure for incorporation of Company by introducing filing of pre-drafted Memorandum and Article of Association electronically, which will make work easier and also prove to Ease of Doing Business.

From 01/05/2015, MCA came with the Integrated process of Incorporation of Company by filing E-form INC-29. This was a major reform brought by MCA for incorporation of company which require filing of only one E-form i.e. INC-29 as against five forms filed earlier (i.e. DIR-3 for application for obtaining DIN, INC-1 for approving the name of company, INC-7 for registration of company with MOA and AOA, INC-22 for registered office and Form DIR-12 for first directors of company). So the process is easy and you get Approval within 48 hours *subject to the satisfaction of departments.

MCA has more facilitated the process of incorporation by introducing SPICe E-form INC-32 which provides the same facilities as were provided in Form INC-29 with more facilitating the process by introducing filing of Memorandum and Article of Association electronically. Relative to the old process, it has the potential to save lots of time, if properly implemented. However, further clarification with regard to incorporation under SPICe are to be provided by Ministry of Corporate Affairs.

So, as of now there are 2 ways to incorporate a company:

No. 1: INC-7, DIR-12 & INC-22

No. 2: INC-32 (Substituted the INC 29)

What is the Difference?

E-Form SPICe (INC-32) deals with the single application for reservation of name, incorporation of a new company and/or application for allotment of DIN. This eForm is accompanied by supporting documents including details of Directors & subscribers, MoA and AoA etc. Once the eForm is processed and found complete, company would be registered and CIN would be allocated. Also DINs gets issued to the proposed Directors who do not have a valid DIN. Maximum three Directors are allowed for using this integrated form for filing application of allotment of DIN while incorporating a company.

ü  Instead of Signature of Subscriber affix the DSC of subscribers.

ü  By affixation of DSC of the subscriber on the INC-33 (e-moa) and INC - 34 (e-aoa) date of signing will be automatically captured  by the form.

ü  In Form INC - 34 Instead of Signature of witness affix the DSC of witnesses.

ü  In Form INC - 34 Director name should be entered mandatory under “Board of directors”. Mention different appointments as a sub-article, E.g. (a) – Managing Director, (b) – Director Names etc.

ü  Maximum 7 (Seven) details of subscribers allowed in SPICe (INC-32).

ü  Maximum 3 (Three) Directors are allowed for using this integrated form for filing application of allotment of DIN while incorporating a Company.

ü  Now Signature of witness done away affix the DSC of 2 witness

Company which can be formed through this e-form ?

ü  Part I Company

ü  Producer Company

ü  Section 8 Company (was not available in INC-29)

ü  Private Company

ü  Public Company , or

ü  One Person Company

Mandatory Attachments:

ü  Affidavit and declaration by first subscriber(s) and director(s);;

ü  Proof of Office address (Conveyance/ Lease deed/ Rent Agreement etc. along with rent receipts);

ü  Copy of the utility bills (not older than two months)

ü  Thus, through SPICE, the Ministry of corporate affairs has made a considerable effort to reduce the hassles and time frame taken for incorporation as well as the paperwork involved.

Thanks & Regards,

CS Chetan Bhadouria

9899399209

chetanbhadouria@gmail.com