Limited Liability Partnership (“LLP”) Registration
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INTRODUCTION
An LLP is a hybrid of a company and a partnership where each partner’s liability is limited to his/her contribution to the capital. A minimum of 2 people are required for its formation. It can enter into a contract and acquire property in its own name since it is a separate legal entity. The procedure for registration of LLP is as follows:
PROCESS
1. First, one has to obtain a Digital Signature Certificate (“DSC”) form government certified agencies which is required for filing of documents online.
2. Second, one has to apply for a Director Identification Number (“DIN”) for all those who wish to be the designated partners in the LLP by filing form DIR-3.
3. Third, one has to get a Name Approval through the LLP-RUN form filing. The MCA portal has a free name search facility which helps one avoid choosing a name already taken. It is processed within 15 days.
4. Fourth, the LLP is incorporated by filing of the FiLLiP form (“Form for Incorporation of LLP”). This form along with the required fees is to be filed with the jurisdictional registrar who has jurisdiction over the place where the registered office of LLP is situated.
5. Finally, the LLP Agreement has to be filed which governs the duties and rights of the partners amongst themselves mutually as well the relationship between the partners and LLP. This is done through form-3 filed online on MCA portal within 30 days of incorporation and LLP agreement is to be printed on stamp paper whose value varies from state to state.
ADVANTAGES / FEATURES
- It is a separate legal entity which can sue and be sued in its own name.
- There is no distinction between who owns and manages the business since partners do both unlike what happens in a company.
- Partners have flexibility in the type of agreement they want to create outlining their rights and duties.
- There is limited liability of partners only to the extent of their contribution.
- An LLP has fewer compliance requirements in comparison to a company.
- Also, an LLP is easy to wind-up in comparison to a company.
DOCUMENTS REQUIRED
- PAN card, address proof of partners, photograph of partners, proof of registered office of LLP and in case of foreign nationals or NRIs one requires a passport.