Limited Liability Partnership (LLP) Registration Procedure

by Enterslice ITES Pvt. Ltd. Start and Manage Business

What is LLP?

Limited Liability Partnership (LLP) is a body corporate formed and incorporated under the LLP Act, 2008. LLP is a legal entity which has a separate identity from its partner. LLP is a newly introduced corporate entity which aimed at small and medium-sized business.

Why should you go for Limited Liability Partnership?

LLP is a partnership where one get the benefits of some features of partnership and companies together. Recently, small and medium entrepreneurs have started opting for LLP considering the following advantage:

·         Benefits of both partnership and companies;
·         No minimum capital requirement;
·         Advantage of Tax Benefits;
·         Lower compliance requirement;
·         Perpetual Succession;
·         Low cost of incorporation;
·   Liability of partners is limited to the contribution mentioned in the agreement.

What is the Procedure of LLP Registration?

Step 1:

All the Partners of proposed LLP has to apply for Designated Partners Identification Number (DPIN). DPIN application shall make in e-form DIR 3.

Step 2:

The Designated Partner whose signatures are to be affixed in e-form shall register their DSC on MCA portal.

Step 3:

File the Form 1 for reservation of name of proposed LLP. You can select up to 6 proposed name of LLP in form 1. Also, need to provide the details of minimum 2 designated partners of proposed LLP. One partner shall be a resident of India. Any individual or Body corporate can be Partner of LLP.

Step 4:

After the reservation of name, the applicant shall file the ‘Form 2’ for incorporation and subscription. In Form 2, the details of partners, the amount of proposed monetary value of partners contribution, Subscriber sheet, proof of registered add, consent form from partners need to be given and if proposed name include any banking, venture, CA, CS, Trademark etc. than in principle approval of the regulatory authority need to attach in form 2.

Step 5:

Upon receipt of complete application, Registrar will issue a certificate of incorporation after satisfying of LLP Act.

Step 6:

After the successful registration, the draft of Limited Liability Partnership agreement needs to be incorporated in line with LLP Act. The agreement is not mandatory at the time of registration can be filed within 30 days of incorporation. All the partners are liable to comply with the provisions of Agreement at all time. Followings are the some imported clause need to be incorporate in LLP agreement:

• Name, Object and Register Office of LLP;

• The initial Contribution of the LLP by Partners;

• Valuation of Non-Monetary contribution;

• The net profits or losses sharing ratios;

• Detail of Designated Partners;

• Interest payable on Capital Loan;

• Remuneration payable to the working partners;

• Mode of operation of Bank Accounts;

• Appointment of arbitrator;

• Rights and Duties of Partners;

• Rights and Duties of Designated Partners;

• Indemnity clause;

• Goodwill clause;

• Procedure to appoint Auditor;

• Admission of New Partner;

• Cessation of Existing Partners;

• Winding up of LLP;

• Amendments of LLP;

• Extent of Liability of LLP;

• Liability of Partners in LLP;

• Other business if any carried

Step 7:

The LLP agreement once finalized need to be filed in Form: 3 (Information with regard to LLP agreement) and Form 4 (Notice of appointment of partner and his consent). The agreement may be filed along with Form 2 or within 30 days of the incorporation.

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