INCORPORATION OF LLP

LLP is defined and governed under LLP Act, 2008 as that business entity where having two Designated Partners is minimum requirement and such partners had their liability limited to their contribution towards the LLP.

The LLP is viewed as an alternative corporate business vehicle that provides the benefits of limited liability but allow its members (partners) the flexibility of organizing their internal structure as a partnership based on mutually arrived agreement. The LLP form would enable entrepreneurs, professionals and enterprises providing services of any kind or engaged in scientific and technical disciplines, to form commercially efficient vehicles suited to their requirements. Owing to flexibility in its structure and operation, the LLP would also be suitable for small enterprises and for investments by venture capital. 

Process of Incorporation

 

1.Deciding the Partners and Designated Partners of LLP

While deciding the partners, it is important to know that who can be the partners or designated partners of LLP, let us know who can be same:

1.      Companies/ Body Corporate registered in or outside India 

2.      LLP registered in in or outside India 

3.      Individual’s resident in or outside India(Atleast one should be resident in INDIA)

Remarks: Although it has been mentioned in the Act that atleast one of the partner should be resident in India, but the form for LLP does not accept any individual as partner if he is not resident in INDIA) 

For incorporating a LLP there should be atleast two designated partners, where the designated partners or partners are body corporate or LLP then a nominee has to be appointed to represent them.

2. Obtain the DSC and DIN of the directors.

Now the individuals intending to be the partners and designated partners, have to be obtain Digital Signature from the authorized certifying agency.

DIN/DPIN

After obtaining the Digital Signature, one has to apply for Director Identification Number (DIN) in Form DIR-3. There is a fixed fee of Rs. 500 and DIN is generated in the challan as soon as the payment is done for the form through online mode.

Attachments for DIR-3

·         Copy of PAN Card (self-attested) (In case of foreign nationals passport is mandatory)

·       Copy of address proof (Self-attested)(Passport, Voter id card, Ration Card, DL, Telephone or Electricity Bill, Bank statement which shall not be older than 2 months)

·         Photograph of the applicant

After getting the DIN, the DSC of the applicant has to be roll checked on the MCA website under associate DSC head in MCA services.

3. Apply for name availability (Form-1)

MCA has provided the name search facility to recognize if any company/LLP exists with the similar name, if not we can go ahead with name. The name to be applied shall also be checked at the trademark site by identifying the class of the product available on trademark site (http://ipindiaonline.gov.in/tmrpublicsearch/frmmain.aspx) if such name is not reserved by any other company/LLP.

After deciding the appropriate name of LLP, download LLP Form-1 from MCA for the reservation of name and fill the appropriate details. Maximum 6 names can be applied with the preference and significance of the proposed names.  After affixing the DSC of the applicant and successful prescrutiny, upload the form on MCA portal after logging in by paying the fee of Rs. 200.

Please note that the residential status of the Designated Partner/Partner should be India, if not the same can be updated via DIR-6 form which is for change in particulars of the Director.

Ensure that details filled are correct as these details will be pre-filled in the Form-2.

4. Apply for Incorporation

The name if approved by the ROC, it is reserved for 3 months. Now, Form-2 which is for incorporation of LLP needs to be filed with ROC. Appropriate information has to be filled as required in the form such as monetary contribution of the partners, registered address of the LLP, industrial activity etc.

Attachments for LLP Form-2

1.  Proof of address of registered office of LLP (NOC if not owned by the company)

2. Subscribers’ sheet

3. Consent of the Designated Partners (Form-9)

4. Detail of LLP(s) and/ or company(s) in which partner/ designated partner is a director/ partner (if applicable).

After attaching the documents, affix the DSC of the Designated Partner and Practicing Professional, precrutiny the form and upload the form on MCA portal.

Fees for Form 2:

Capital	Fees (INR)
Upto 100000	500
More than 100000 and less than or Equal to  500000	2000
More than 500000 and less than or Equal to 1000000	4000
More than 1000000	5000

Note: If the Registrar is satisfied, with the documentation, he will issue a Certificate of Incorporation which will be conclusive evidence of formation of LLP. On incorporation LLP-IN will be issued.

5. Drafting of LLP Agreement and filing Form-3

LLP agreement has to drafted as per the LLP Act, 2008 and Rules specified therein. The agreement has to be made between the Designated partners/Partners who have signed to join the same. The good LLP agreement should have all the detailing for carrying out the business of LLP. It should clearly mention the details of the partners, contribution, profit ratio, rights and obligation of the parties. The agreement can be made as per the mutual understanding of the partners.

The LLP agreement has to be stamped in accordance with the Stamp Act applicable in the relevant state where the LLP is being incorporated.

The LLP agreement has to be filed in Form-3 within 30 days from the date of registration. It is mandatory to file Form-3 before filing Form 8 and Form 11. It is very important to file within 30 days otherwise the penalty has to be born by the LLP. 

Fees for Form 3:

Capital	Fees (INR)
Upto 100000	50
More than 100000 and less than or Equal to  500000	100
More than 500000 and less than or Equal to 1000000	150
More than 1000000	200

 After the forms get approved by the registrar, the LLP can start it business.