Summary: The article outlines the incorporation and post-incorporation process for a Limited Liability Partnership (LLP). It explains that selecting an appropriate business structure requires considering the nature of the business and the compliance requirements applicable to each form of organization. The incorporation process is divided into three stages. The pre-incorporation stage includes identifying the business activity, selecting designated partners and partners, finalizing proposed names, obtaining Digital Signature Certificates (DSCs), keeping required documents ready, and creating a Ministry of Corporate Affairs (MCA) user ID. The incorporation stage involves filing Form RUN-LLP with a fee of INR 200 for name reservation, followed by Form FiLLiP containing details of the registered office, business activities, designated partners, partners, capital contribution, and PAN/TAN particulars, along with required attachments and a filing fee of INR 645. After incorporation, the LLP Agreement is drafted, executed on stamp paper, notarized, and filed through Form 3 with a fee of INR 50. The article also notes registration with applicable authorities such as Income Tax, GST, PT, and PF, and annual compliance requirements including filing Form 11 by 30 May and Form 8 by 30 October.
Introduction: Incorporating a Limited Liability Partnership (LLP) consists of several stages of planning and executing the plan effectively and efficiently. A business owner or an entrepreneur has to undergo several days of research on a very important aspect: understanding the best form of organization for their business. It may be a sole proprietorship wherein the ownership of the business stays completely with the proprietor himself, or it may be a partnership firm with a limitation of unlimited liability on the partners, or it may be a limited liability partnership or a company with a status of private or public.
The whole idea of understanding the business form is important, as different forms have different requirements and compliance-wise, each form of business differs from the others.
In this particular article, we shall understand the incorporation and post-incorporation procedures for a Limited Liability Partnership.
The Incorporation process consists of several stages, and we shall see through each stage in detail.
Stage 1 – Pre LLP Incorporation planning
This stage consists of a crucial planning process regarding
1. Identifying the nature of the business, whether it should be a service-oriented or a trading-oriented business.
2. Identifying the right individuals who would be ideal for being appointed as the designated partners and partners.
3. Finalizing two names for the business that would suit the nature of the business. Ideally, it is recommended to have a few more options for naming the business.
4. Acquiring the Digital Signature Certificates (DSC) for the individual who shall be appointed as the designated Partners
5. Keeping all the documents handy, like the Aadhaar card, PAN, Mobile Number, Email ID, recently paid Utility bills, Municipal tax challan, etc. The required details will be easily available online, and accordingly they can be kept handy for the registration purposes
6. Creating the User ID with the Ministry of Corporate Affairs (MCA)
Stage 2 – Filing of Forms with the MCA
This stage is where the actual compliance for the incorporation of an LLP begins.
1. Filing of Form RUN-LLP, which is for reserving the name of the LLP. A filing fees of INR 200 is to be paid through the available payment gateways on the MCA (Usually it is Bharat Kosh)
2. Within 24 to 48 Hours, we will get the certificate of name reservation, and you will be eligible to proceed further with the incorporation.
3. Once the name is reserved, we should file Form Fillip, which is the actual form filed for the incorporation of an LLP.
4. You fill in the details of the LLP, like the proposed registered office address, longitude and latitude of the location so proposed, along with proof of address and NOC if applicable, and a copy of a utility bill which is not more than 2 months old for the office space.
5. Details of the business to be carried out, along with the industry codes, must be entered in the form.
6. In the same form, information of the individuals who are to be appointed as designated partners must be entered along with the information of individuals who shall be appointed as partners along with their capital contribution.
7. After entering the details of individuals, details of PAN and TAN such as Range, area code, ward, etc., are to be provided for obtaining them along with the certificate of incorporation. You need not apply for them separately.
8. Once the form is filled, you have to attach the subscriber’s sheet along with Form 9 as an attachment to the form and get it attested by a practicing CA, CS, or a CMA along with a filing fee of INR 645. It will take up to 5 to 7 working days for the form to get processed, and in some cases, if the form requires resubmission, it may take even longer to get processed.
Stage 3 – Post LLP Incorporation
1. Once you receive the LLPIN along with the certificate of incorporation, you should now proceed with the most crucial part of the process, the Agreement drafting. It must be drafted with utmost care as each term and condition mentioned in the agreement forms an integral part of the same.
2. Once the agreement is finalized and printed on a stamp paper after paying appropriate stamp duty, it must be notarized by a notary officer.
3. After getting the agreement notarized, Form 03 is to be filed by the LLP, which is for the LLP Agreement, after paying a filing fee of INR 50. The form gets approved instantly.
4. Hereafter, you can proceed with getting registered with the appropriate regulating authority, like the Income Tax, GST, PT, PF, and any such regulating authority that is applicable for your business.
5. Once the Financial year is completed, filing of Form 11 is required within 60 days from the last day of the financial year, i.e 30th May annually.
6. Within the first six months from the end of the financial year, the LLP has to file Form 08, i.e 30th October annually.
