Limited Liability Partnership

  • Name of the Proposed LLP
  • Significance of the Name
  • Objective of the Business
  • DIN of Partners (if available)
  • Class II Digital Signatures
  • KYC of partners
  • Authorised Capital Contibution
  • Address of Registered Office alongwith proofs
  • NoC from the owner of the Registered Office of the LLP
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WHAT?

Limited Liability Partnerships (LLPs) are governed by the Limited Liability Partnership Act, 2008. LLPs are just like other Partnership Firms with the exception that the liability in case LLP is limited to the extent of the capital contributed in the LLP.

Now a days it has become one of the most popular form of doing business because of the following:
  1. As compared to a Company, LLP are required to follow less compliances.
  2. As against the Partnership Firms, LLP enjoy a separate legal status.
  3. As against the Partnership Firm, the partners of the LLP have a limited liability to the extent of the capital contributed by each of the partner.
  4. As against a Company, partners are sole decision making authority and have the freedom to decide the way they want to manage and run the business
WHY?
Easy in Formation
Limited Liability Partnership are comparatively easy to form and manage in India having simple registration process and less formalities. with Ministry of Corporate affairs,
No Minimum Capital
An LLP can be started with a minimum amount of capital money. The capital can also be in the form of an asset other than monetary contribution.
LLP Agreement
An LLP is managed on the basis of the terms and conditions incorporated in the LLP Agreement through mutual consent of the partners.
Maximum Owners
An LLP needs minimum of 2 partners, whereas there in no limit on the maximum number of partners unlike in case of normal partnership firm and a Company.
Legal Capacity to Sue
An LLP has the capacity to initiate a legal proceedings against any person or entity in its own name before the court of law.
HOW?

A Limited Liability Partnership is registered under the provisions of the LLP Act, 2008 with the Ministry of corporate Affairs through the procedure prescribed under the Act and Rules and Regulations made there under.

  • Step1: Name Approval: - Name of the proposed LLP will be applied in E-Form -1 of the LLP with the concerned Registrar of Companies (ROC) by the Partner already having a valid DPIN (Designated Partner Identification Number), thereafter after processing of same approval or rejection will be communicated to the applicant by the ROC.
    To avoid rejection of the name the name should be as per the guidelines provided under Companies (Incorporation) Rules, 2014.
    The name of the limited Liability Partnership must contain the words "LLP" in the end.
  • Obtaining Digital Signatures: - Digital Signatures of the all the partners needs to be obtained for the incorporation of the LLP. For obtaining the Digital Signatures following KYC details are required:
    1. Identity Proof, i.e., PAN Card (Self Attested)
    2. Address Proof, i.e., Aadhar Card (Self Attested)
    3. Photographs
    4. Valid Phone Number
    5. Valid E-mail id
  • Step 3: Documents Preparation: - Once the name gets approved by the department, the documents are prepared as per the guidelines given under the Act / Rules for the incorporation of the LLP.
  • Step 4: Incorporation: E-Form - 2: - shall be filed for the incorporation of the LLP. The said form contains all the details of the proposed LLP, Partners/Designated Partners details, Consent of the partners/Designated partners.
  • Step 5: Certificate of Incorporation: - After E-Form-2 has been filed with the ROC, and if all the details are as found to be satisfying, the concerned ROC shall issue a Certificate of Incorporation to the LLP.
  • Step 6: LLP Agreement: - After the Certificate of Incorporation is issued to the LLP, Designated Partners/Partners are required to execute an LLP Agreement and file the said agreement in E-Form - 3 within 30 days of the Incorporation of the LLP.
    The LLP Agreement generally contains the following details:
    1. Details of all partner/designated partners
    2. Name of the LLP
    3. Date of commencement of the LLP.
    4. Registered office of the LLP.
    5. Main object of the business of the LLP.
    6. The capital contribution of the said partners/designated partners.
    7. Profit-sharing/loss-sharing ratio between the partners/designated partner.
    8. Rights and Duties of the partners/designated partner.
    9. Liabilities of the partners/designated partner.
    10. Remuneration of the partners/designated partner(if any.)
    11. Bank account operations of the LLP.
    12. Arbitration clause.
    13. And other miscellaneous clauses as may be mutually agreed between the partners/designated partner.