A limited liability partnership (LLP) is a partnership in which partners liability is limited. In an LLP each partner is not responsible/ liable for another partner’s misconduct or negligence. This is an important difference from the traditional partnership registration under the 1932 in which each partner where liable for work of another partner. It is a more organized and professional way of doing business in partnership form in India.
As per Limited Liability Partnership Act, 2008 (governing law for formation of LLP) LLP means a partnership formed and registered under this Act. This means for forming a LLP its mandatory to get your entity registered with Ministry of corporate affairs (ROC). LLP being separate legal entity in eyes of law can do work on its own name and get all licenses and registration in its own name.
The average time to complete process for company registration/ incorporation is 15 days.
Process of LLP (Limited Liability Partnership) Registration/ Incorporation?
LLP registration/ Incorporation is legal process of establishment of new organization by registering the organization with Registrar of companies (Government). Following are process for LLP registration
Step 1: Making DSC
The Information Technology Act, 2000 provides for use of Digital Signatures on the documents submitted in electronic form to any authority to ensure the security and authenticity of the documents filed electronically. Hence all filings done formation of LLP(s) are required to be filed by using DSC (Digital Signatures certificate)
Step 2: Applying DIN (Director Identification Number)/ DPIN (Designated Partner Identification Number) of proposed designated partners of LLP
All designated partners of the proposed LLP shall obtain “Designated Partner Identification Number (DPIN)”. We need to file E Form DIR-3 with ROC to obtain DIN or DPIN. If you already have a DIN (Director Identification Number) the same can be used as a DPIN.
Step 3: Applying for name approval in E form 1 to ROC
For incorporation of LLP first we need to get proposed name approved from ROC. Form same we need to file E Form 1 to ROC after filling E Form 1 if ROC has no objection ROC will issue certificate for name availability.
Step 4: Filling incorporation documents to ROC in E form 2
After name confirmation from ROC we need to file E Form 2 to ROC for incorporation of LLP. ROC will scrutinize the form filled and if everything is in order ROC will issue a certificate of Incorporation.
Step 5: Filling LLP Agreement
After incorporation of LLP a LLP agreement is to be filed within 30 days of incorporation of LLP. LLP agreement is filled in E Form 3 to ROC.
Advantages of LLP Registration/Incorporation:
- Separate Legal Entity
- Liability of partners are limited
- Limited liability of share holders
- Easy transfer of ownership
- Tax benefits
- Capacity to sue and to be sued
- Easy to raise funds
Requirements for LLP registration:
- Minimum two partners
- All partners should have director identification number(DIN)/ DPIN
- All partners should have digital signature certification (DSC)
- Registered office address
- Partnership Deed