The Limited Liability Partnership (LLP) company structure is well-liked and recognized worldwide. Corporate clients, suppliers, and governmental organizations prefer working with LLPs over sole proprietorships or traditional partnerships. Despite having less compliance than the company, the firm still needs to be taken care of. If disregarded, a late charge penalty metre will increase.
Following the LLP Act of 2008’s LLP Registration procedures is necessary to achieve this goal. In terms of incorporation and management, the creation of an LLP is simple because of this: family-owned, closely held professions and micro and small businesses prefer to register as LLPs. In addition, there are compliance formalities. As a result, this article provides an in-depth explanation of the LLP registration process in India.
LLP Pre-registration Requirements
1. Eligibility Criteria
For an LLP to be registered, it must include at least two Indian citizens as partners and two ‘Designated Partners’, at least one of whom must be a resident of India.
2. Name Reservation
An LLP must have the words “Limited Liability Partnership of the acronym “LLP” at the end of its name. The three components of an LLP name are “The Name,” “Activity,” and the abbreviation “LLP” for a limited liability partnership. The Registrar of Companies must approve the proposed LLP name.
3. Registered Office
An LLP’s statutory communications should be sent to its registered office address. In addition, you need a letter of consent from the owner of the address stating that you have no objections to using the address as your LLP’s registered office.
4. Document Preparation
The partners’ documentation and the LLP’s registered office documents fall under the two kinds of documents needed for limited liability partnership registration.
Documents of Partners
The following documentation will have to be provided by each member of the LLP:
- PAN Card/ ID Proof of Partners – At the time of LLP registration, all partners must provide their PAN. The PAN card is the main form of identification.
- Address Proof of Partners – Partner may provide any documents: passport, voter identification, Aadhaar Card, or driving licence. Name and other information should match completely with address proof and PAN card.
- Photograph – A photograph the size of a passport on a white backdrop.
- Residence Proof of Partners – Each partner and promoter must self-attest an electricity bill, cell phone bill, landline bill, and bank statement as proof of address; this is unnecessary for a DIN holder. A bill or declaration of this nature shouldn’t be older than 2-3 months.
- Passport – Foreign nationals and NRIs must submit their passports to become partners in an Indian LLP.
Foreign nationals or NRIs must also submit a residence card, driving licence, bank statement, or other government-issued identity proof with an address.
A translation copy that has been notarized or apostilled will be included if the documents are not in English.
Documents of LLP
The following documents about the LLP entity must be presented under legal obligation:
- The registered office address must be verified during registration or within 30 days of the LLP’s incorporation, whichever comes first. A rental agreement or landlord’s NOC must be provided if the registered office is rented. Additionally, you must provide at least one proof of residency, such as recent electricity bills (within the last two months).
- A DSC is crucial since the authorized signature will digitally certify all applications and documents.
LLP Registration Filing
A Limited Liability Partnership must be incorporated or registered according to the LLP Act. According to the Act’s provisions, a Form 2 application must be submitted to the Registrar of Companies to form an LLP. The entire procedure is done online, from finding the form to submitting it. Below, we have an outline of the LLP registration process in steps.
1. Getting a Digital Signature Certificate (DSC)
The initial step in creating an LLP is obtaining each designated partner’s digital signature. To apply for DSC, each designated partner must submit their PAN card, identity documentation, proof of address, and passport-size photo. The LLP’s paperwork is filed digitally; thus, a digital signature is required. These documents have digital signatures, which further aid in certificate acquisition.
2. Getting a Director Identification Number (DIN)
Yet another required document for all of the LLP’s approved partners is the DIN. For this procedure, the DIR-3 form is provided. The state’s ROC (Registrar of Companies) assigns each partner their own DIN. Together with the self-attested copies of Aadhaar and PAN cards, the DSC of the professional and the selected partners is also necessary.
3. Name Reservation
To register a proposed LLP, the applicant must obtain a Limited Liability Partnership-Reserve Unique Name (LLP-RUN) that can be handled at the Central Registration Centre. Before mentioning or quoting a name, verifying the Ministry of Corporate Affairs (MCA) online is usually suggested to see if it is a free name. This will give a list of businesses with names that are the same as or similar to a proposed LLP. The registrar will approve the name after it has been selected if it is not too similar to any other existing LLP. The LLP-RUN must be filed along with a fee, after which the registrar’s permission will be sought.
4. Incorporation of LLP
Filling out and submitting the LLP incorporation form to the registrar is necessary for LLP incorporation. Payment requirements are listed in Annexure “A.” The number of applicants for allocation is limited to two.
5. File LLP Agreement
The LLP agreement sets forth each partner’s rights and obligations towards the other and the LLP and its partners.
- LLP agreements must be submitted online through MCA Portal in Form 3.
- The LLP agreement Form 3 must be submitted within 30 days of the formation date.
- Stamp-paper printing is required for the LLP Agreement. For each state, the price of stamp paper varies.
6. Forms Required
RUN – LLP: This can be used in place of Form 1 to establish a name for the LLP.
FiLLiP: This replaces Form 3 for the LLP’s incorporation.
Form 5: To rename an LLP.
DIR 3: To sign up as a new user for the first time on the MCA portal.
Form 17: For transforming a current partnership into an LLP.
Form 18: For transforming a private organisation into an LLP.
7. Payment of registration fees
The cost details of the registration procedure are listed below:
- DSC for two partners is roughly Rs. 1500-2000.
- The cost of a name reservation is about 200 Rupees.
- Capital contribution determines whether an incorporation certificate is issued. The minimum contributions will be Rs. 500; the maximum is between Rs. 1 and 5 lakhs to Rs. 2000.
- Capital contribution is a requirement of the LLP Agreement. Depending on the state where the LLP was created, contributions up to Rs 1 lakh also included Rs 50 for submitting Form 3 and stamp duty.
- For an LLP Deed, there is a stamp tax of up to Rs. 2000, and it is notarized in any state in India.
The cost indicated above may change. Please click here to contact our expert team and get detailed price estimates.
LL Post-registration Compliance
The Certificate of Incorporation is just the first step in a series of compliances that an LLP is occasionally required to follow in India due to various laws. Before being incorporated, several other types of corporations, including the private company, must also meet specific compliance criteria. These requirements include registering for the Goods and Services Tax (GST), getting a Permanent Account Number (PAN), getting a Tax Deduction and Collection Account Number (TAN), and completing annual returns. Penalties and legal repercussions may occur if the LLP does not abide by these rules. In contrast to the post-incorporation compliances necessary for an organisation, the total compliance necessary for an LLP is less demanding. Compliance standards may differ from business to business depending on the type of organization and the nature of company activity. As a result, the title “Post-Incorporation Compliances for LLP” will aid in your understanding of the compliance standards necessary to enable the proposed LLP’s successful incorporation.
Conclusion
Private Limited Companies, sole proprietorships, and partnerships are the most common business structures in India. A particular set of laws governs each type of business. The benefits of LLP should be available to businesses that offer professional services, as opposed to those that engage in trading or manufacturing. Aspects of the LLP Act have also recently been added, making it possible for small-scale enterprises to register as LLPs in India. Due to the flexibility this affords in ownership and management, partners can maintain control over their companies while being subject to only minimal liability. It enables people to launch their enterprises with minimal risk. As a result, there are now more LLP registrations in India, helping the economy expand.
Applicants no longer have to bother with any paperwork or other processes when attempting to incorporate an LLP in India. The Ministry of Corporate Affairs has included all facilities in the forms to enable a simple and transparent incorporation process. However, the LLP Act 2008 requires that the procedures for LLP Registration be followed, and this article can assist you in grasping what is required. In terms of incorporation and management, creating an LLP is simple with Kanakkupillai.
