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Introduction
LLP stands for Limited Liability Partnership. It is a hybrid corporate business form that gives the benefits of both limited liability like a company and flexibility of a partnership. As per Limited Liability Partnership(second Amendment) Rules, 2022, an LLP can be incorporated with 5 designated partners instead of 2 designated partners (without DIN). The registration process and other regulations are governed by the Limited Liability Partnership Act, 2008. In this blog we will discuss the registration process of LLP.
What is Limited Liability Partnership (LLP)?
A Limited Liability Partnership (LLP) refers to the partnership in which partners have limited liability. It has the features of both partnership as well as company. An individual partner in an LLP is not answerable or liable for the wrongdoings or negligence of any other partner. It can hold property in its own name and enter into contracts.
Benefits of registering LLP
An LLP enjoys the status of separate legal entity.
The partners of LLP are only liable to pay for the agreed contribution to company.
The existence of the LLP is not affected by the death of any partners.
Requirement of registering LLP
LLP can have 5 designated partner instead of 2 designated partner (without DIN) at the time of incorporation.
One of the designated partners should be an Indian resident.
Each partner of LLP should have agreed contribution towards the share capital.
An LLP must have an authorised capital of at least INR 1 lakh.
LLP Registration process in India
The LLP registration process includes following steps:
Get a digital signature (DSC)
The documents required for the registration of LLP is submitted online and are required to be digitally signed. Therefore, you should apply for a digital signature of all the designated partners for the proposed LLP.
Apply for the Director Identification Number (DIN)
DIN is another necessary document for all the designated partners of LLP. After you get the DSC, you should apply for DIN for all the partners.
Apply for name approval
The LLP has to file LLP-RUN (Limited Liability Partnership- Reserve Unique Name) Form on MCA portal. This form is filed to reserve name for the proposed LLP.
File the FiLLiP Form for incorporation of LLP
The next step would be to file the form for incorporation of LLP i.e. FiLLiP (Form for incorporation of Limited Liability Partnership) which shall be filed with the Registrar who has a jurisdiction over the state in which the registered office of the LLP is located. This form also provides for applying for allotment of DPIN if an individual who is to be appointed as a designated partner does not have a DPIN or DIN. Also, PAN and TAN Application can now be applied with the Incorporation Form itself (with the introduction of LLP (Second Amendment) Rules, 2022).
Draft the LLP Agreement
Once you incorporate LLP, the next step would be to draft and file an LLP agreement which governs the mutual rights and duties amongst the partners and also between the Limited Liability Partnership(LLP)and its partners. The LLP agreement is to be filed in Form 3. It should be printed on Stamp Paper and the value of Stamp Paper differ from state to state.
Documents required for registration process
Photograph of all the Partners.
PAN Card of all the Partners.
ID Proof of all the Partners (Voter ID/ Driving license/Passport.)
Electricity Bill or any other utility bill of Registered office for the address proof.