Understanding Incorporation of LLP
A limited liability partnership (LLP) is an arrangement in which limited liabilities occur in some or all arrangements (depending on the jurisdiction). It can also show relationship and company elements. Any partner in an LLP is not responsible or liable for wrongdoing or neglect of another partner. This is a major distinction from the conventional relationship in the UK Partnership Act 1890, which has a shared (but not several) responsibilities for each partner. In an LLP, limited liability for any or all partners is close to that of a company. The partners have a right to personally administer the corporation, unlike their company owners.
Steps to be followed before the name application process :
- Searching on if the Name is possible by Searching LLP Name should be performed
- One can also check for Trademark Public Search if Registered Trademark is the first term of the name. If indeed, you need not apply for the same.
**Without previous NOCs from the current Appointed Partenaire of that LLP / Co / Proprietor, a term already licensed as a trademark should not be applied.**
Features of LLP
- It has a separate legal entity just like companies
- The liability of each partner is limited to the contribution made by the partner
- The cost of forming an LLP is low
- Less compliance and regulations
- No requirement of minimum capital contribution
The minimum number of LLP incorporating partners is 2. The actual number of LLP partners does not have an upper bound. There should also be at least two assigned spouses, at least one of whom should be residents in India. The LLP Arrangement regulates the responsibilities and obligations of appointed partners. They are solely responsible for complying with all the provisions of the LLP Act 2008 and LLP arrangement provisions.
Procedure for Incorporation for LLP :
Digital Signature Certificate (DSC)
You have to apply for the digital signature of the designated partners of the proposed LLP before starting the registration process. All the papers for LLP are filed electronically and must be signed digitally.
The appointed partner must then receive digital certificates from official recognition organizations. A list of these approved organizations is given below. DSC costs differ according to the certifying agency. You can also obtain DSC Class 3 or you can let the specialist at the Tax Mill procure your DSC.
Designated Partners Identification Number (DPIN)
All partners or those who wish to be a designated partner of the proposed LLP are expected to apply for the DPIN.
A submission must be made in Form DIR-3 for assigning of DPIN. The scanned documents (usually Aadhaar and PAN) must be attached to the form. The document shall be signed by a full-time employing secretary of the company or, as the claimant appoints the managing director/director/director/CEO/CFO of the current company.
Name reservation
The name of the proposed LLP, that must be processed by the Central Registration Center under the Non-STP is filed under reserve LLP-RUN (Limited Liability Partnership-Reserve Specific Name). It is advised that you use the free name search facilities on the MCA portal before entering the name in the document. Based on the search criteria, the system would list identical names for current companies/LLPs.
This allows you to pick names that are not identical to current names. The name of the registrar shall be allowed only if, in the view of the central government, the name is not unwanted and does not imitate an established partnership business or LLP, organization, or trademark. Annex 'A,' which may be accepted/denied by the registrar, shall be followed by a Form RUN-LLP. For the repair of defects, re-presentation of the form is permissible within 15 days. Two suggested names of an LLP are included in a clause.
Proof of Registered office
- The form used for incorporation shall be FiLLiP (Form for incorporation of a Limited Liability Partnership) lodged with the Registrar having authority over the State in which the LLP has its registered office. An interconnected shape would be the form.
- Fees are to be charged as per Annex'A.'
- This form also allows for applications for DPIN allocation where there is no DPIN or DIN for a person who is to be assigned as a designated partner.
- The proposal for allocation can only be made by two people.
- A reservation request can also be made via FiLLiP.
- If the name requested is accepted, the name so approved and reserved shall be filled in as the proposed name of the LLP.
File LLP Agreement
The shared rights and obligations between the partners and even between the LLP and its partners are controlled by the LLP agreement.
- It is necessary to file the LLP agreement in form 3.
- It is appropriate to file Form 3 for the LLP agreement within 30 days of the date of incorporation.
- There is a need to print the LLP Agreement on Stamp Paper. For every state, the value of stamp paper is different.
