LLP Registration

Limited Liability Partnership (LLP) Registration

Whenever a budding entrepreneur gets on the pedal of the entrepreneurship journey, the first and perhaps one of the biggest initial dilemma in their mind is what structure of the company should they perform. LLP or Limited Liability Partnership is among one of the options that could be explored.

LLPs or Limited Liability Partnerships are commercial vehicles which basically combines the features of partnership and company form of business. The Limited Liability Partnership (LLP) was for the first time introduced in India by way of Limited Liability Partnership Act, 2008. It was notified on 31st March 2009.

One of the major advantage of an LLP over Partnership is that, any individual partner is not liable for another partner’s misconduct or negligence as in an LLP arrangement, all partners have limited liability for each individual’s protection within the partnership, which is identical to that of the shareholders of a limited company to an extent but differs in a way as the partners have the right to manage the business directly. It also limits the personal liability of a partner for the omissions, errors, incompetence, or negligence of the LLP’s employees or other agents.

The Main Steps to Form an LLP Registration are:

1. Obtain a Digital Signature Certificate (DSC)

As the name suggests Digital Signature Certificates (DSC) are the digital equivalent of physical or paper certificates. Few Examples of physical certificates are drivers’ licenses, passports or membership cards. Any licensed Certifying Authority (CA) issues the digital signature. Certifying Authority (CA) means a person who has been granted a license to issue a digital signature certificate under Section 24 of the Indian IT-Act 2000.

2. Apply for Director Identification Number (DIN)

DIN is a unique Identification Number allotted to an individual who is appointed as a director of a company, upon making an application in form DIR-3 pursuant to section 153 & 154 of the Companies Act, 2013. Any individual intending to become a Director in a newly formed Company is required to apply for the allotment of Director Identification Number only through SPICe e-form at the time of incorporation.

3. Company Name Approval/Reservation

An application for reservation of name is through the web service available at www.mca.gov.in by using RUN (Reserve Unique Name) along with fee as provided in the Companies (Registration offices and fees) Rules, 2014, which may either be approved or rejected, as the case may be, by the Registrar, Central Registration Center”.

4. Incorporation of LLP

FiLLiP(Form for incorporation of Limited Liability Partnership) is the form that is used for incorporation that has to be filed with the Registrar with a jurisdiction over the state in which the registered office of the LLP is situated. The form will be an integrated form.

• As per Annexure ‘A’ shall be paid as fees.
• 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.
• The application for allotment shall be allowed to be made by two individuals only.
• The application for reservation may be made through FiLLiP too.
• If the name that is applied for is approved, then this approved and reserved name shall be filled as the proposed name of the LLP

5. File Limited Liability Partnership Agreement

Document Required

Documents Required For LLP Registration

LLP agreement governs the mutual rights and duties amongst the partners and also between the LLP and its partners. LLP agreement must be filed in form 3 online on MCA Portal. Form 3 for LLP agreement has to be filed within 30 days of the date of incorporation.

The LLP Agreement has to be printed on Stamp Paper. The value of Stamp Paper is different for every state. Documents of Partners:

1. PAN Card/ ID Proof of the Partners
2. Address Proof of the partners
3. Residence Proof of Partners
4. Photograph
5. Passport (in case of Foreign Nationals/ NRIs)

Documents of LLP:

1. Proof of Registered Office Address
2. Digital Signature Certificate

The LLP has a separate legal entity just like companies and also more cost effective to incorporate than a Pvt. ltd. company as it requires comparatively less compliance and also comes handy from the tax perspective. However, just like any other company formation method it also has its own shortcomings in the longer run.