Discover the process and documents required for Limited Liability Partnership (LLP) registration. Understand the advantages, structure, and steps involved in forming an LLP.
LLP is a type of alternative corporate business structure that combines the benefits of a company’s limited liability with the flexibility of a partnership. The LLP can continue to exist despite changes in partners. It can engage into contracts and own property in its own name.
The LLP is a separate legal entity that is liable to the full amount of its assets, but the partners’ liability is limited to their agreed contribution to the LLP. Furthermore, no partner is liable for the autonomous or unauthorized actions of other partners, therefore individual partners are protected from joint liability resulting from another partner’s unlawful business decisions or wrongdoing.
Structure
LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession. A minimum of two partners are required for formation of an LLP. There is not any limit to the maximum number of partners.
Every Designated Partner would be needed to receive a “Designated Partner’s Identification Number” (DPIN), similar to how directors of corporations are required to obtain a “Director’s Identification Number” (DIN).
Documents required for LLP registration
LLP Registered office –
1. 2 Proposed names
2. Capital contribution of the partners
3. Nature of Business/ Business Activity
4. Address of Registered office with Rent agreement (if rented property) and NOC (if owned)
5. Electricity Bills/ Utility bills for Address proof (last two months)
6. LLP email id and mobile number
For Partners –
1. Partner’s Aadhar
2. Partner’s Pan
3. Electricity Bill/ Bank statement for address proof (Latest)
4. Partner’s Mobile Number
5. Partner’s Email Id
Procedure of LLP Registration
Step 1: Getting Digital Signature Certificate (DSC)
The first step in registering an LLP is to get digital signatures from all of the LLP’s chosen partners. Because the LLP’s paperwork is filed online, a digital signature is necessary. These documents include digital signatures, which aids in the certification process.
Step 2: Applying and Reserving of Name
The applicant must get a Limited Liability Partnership-Reserve Unique Name (LLP-RUN) that can be processed at the Central Registration Centre in order to register a prospective LLP. However, before mentioning or quoting the name, it is always advisable to check for a free name on the Ministry of Corporate Affairs (MCA) portal. This will return a list of companies with names that are the same or similar to the proposed LLP’s. Once a name has been selected, the registrar will approve it as long as it is not too close to any existing LLP. The LLP-RUN must be filed along with a fee before it can be approved by the registrar.
Step 3: Incorporation of LLP
For LLP incorporation, a form for incorporation of Limited Liability Partnership (FiLLiP) must be filled out and submitted to the registrar. Fees must be paid in accordance with Annexure ‘A’. Only two people will be allowed to apply for allocation.
Step 4: File Limited Liability Partnership Agreement
This agreement governs the partners’ mutual rights and duties. The agreement can be entered online in Form 3 on the MCA Portal. Form 3 for LLP agreement must be filed within 30 days of establishment. The LLP Agreement must be printed on Stamp Paper, which is different in each state.
Time taken in LLP Registration
It takes approximately 15 days to get DSC and Form 3, subject to availability of all the documents.
Cost of LLP registration
1. DSC – Around Rs. 1500-2000 for 2 partners
2. Name Reservation – Rs. 200
3. Incorporation – Depends on capital contribution (Contribution up to Rs. 1 lakh – Rs. 500 & Contribution between Rs. 1 and 5 lakh – Rs. 2000)
4. LLP Agreement – Depends on capital contribution. (Contribution up to Rs 1 lakh – Rs 50 for filing Form 3 and stamp duty based on the state where LLP is formed).
In conclusion, an LLP offers a favorable business structure that combines limited liability with partnership flexibility. It provides partners with protection against personal liability while allowing the LLP to continue operating seamlessly. By following the prescribed registration process and submitting the necessary documents, entrepreneurs can establish an LLP and enjoy the benefits it offers.
Author Bio
