Limited Liability Partnership (LLP) Act came into force for most part, on 31st March, 2009 followed by its Rules on 1st April, 2009.

It is hybrid form which incorporates benefits of both partnership and companies. It has the following features:

1. Separate legal entity in the eyes of Law.

2. Cost of incorporation is very less.

3. Small Entrepreneurs can opt for LLP.

STEPS FOR INCORPORATION:

A) Obtain DSC of the individuals who are willing to be partners in LLP.

B) Then apply for DPIN/DIN of the partners with the following attachments:

Identity of applicant: PAN of the person Residence Proof of applicant: Aadhar card, driving License, passport, election card, ration card, electricity bill, telephone bill.

C) Once the DIN is approved, make an application for name of LLP in Form 1 where you can apply for maximum 6 names as per the preference, out of which one would be allotted. State the significance of the key or coined word in the proposed name in brief. The applicant can either be an individual as Partner or Nominee of Body Corporate.

D) Once, the name is approved, File Form 2 with the ROC which contains details of the Partners, Designated Partners, Monetary Contribution. File Form 2 with ROC along with following attachments. Pay the prescribed registration fee as per LLP Rules, based on the total monetary value of contribution of partners in the proposed LLP. (Contribution can be Below 1 Lakh Rupees). On submission of complete documents the Registrar, Certificate of Incorporation will be issued.

Attachments of Form 2
  • Subscriber’s Sheet
  • Address Proof (not older than 2 months) (Utility Bill)
  • NOC (No Objection Certificate from Owner of the Premises in case it is rented/Leased).
  • Interest in other entities.

E) Post receipt of Incorporation Certificate, File Form 3 within 30 days of Incorporation of LLP with ROC which is LLP Agreement where all the terms and conditions would be mentioned for complying with the Provisions of the Act. Format of LLP Agreement is available on various portals. If required, drop me a mail. Once it gets approved all the formalities for registration gets completed.

KEY POINTS TO BE REMEMBERED:

  • Every LLP is required to file Annual Return in Form 11 to the Registrar within 60 days from the closure of financial year i.e the Annual Returns has to be filed on or before 30th Mayevery year and Form 8 Statement of Insolvency within 30 days from the end of the 6 months of the Financial year to which the Statement of Accounts relate i.e by 30th
  • It may be noted that it has been clarified by the Ministry of Corporate Affairs that a HUF or its Karta cannot become partner or designated partner in LLP.
  • Penalty for late filing of Annual Return is 100 Rs per day. Hence, timely compliance is very important.
  • Minimum 2 designated partner are required.
  • Nominee of the Body Corporate and the Designated partner cannot be the same person i.e the Person cannot sign in dual capacity.
  • Out of the two Designated Partners, One Partner should be Resident of India.
  • Filing of LLP Agreement is mandatory before going for strike off.
  • In summary, Form 1, 2, and 3 will be filed with ROC.
  • As per the Notification dated 16.05.2017, overdue returns in Form 8 and Form 11 is to be filed up to the end of the financial year in which the limited liability partnership **ceased to carry on its business or commercial operations before filing Form 24;

** For Eg: If the LLP was incorporated on 01.04.2014. Company carried the Business activities for One year i.e till 31.03.2015. Company want to go for strike off in March 2017.Post 31.03.2015, no business was done.

In this case, it is mandatory to File Form 8 & Form 11 for FY 14-15 before going for Strike off. Company can prepare Nil Returns for FY 15-16 & FY 16-17 and attach it in Form 24 as an attachment since the notification says upto the date company ceased to carry on its business or commercial operation. In the given case, company ceased its operation in March 2015 only. Hence filing required for March 2015.

Link of MCA Notification:  https://taxguru.in/corporate-law/limited-liability-partnership-amendment-rules-2017.html

Please refer all the relevant sections, rules, amendments and consider all the necessary           requirements as applicable. The author is not responsible for any losses caused or incurred.

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